Can you trade water? why not? you pay for water, do you not? you pay for water at home, you pay for it in bottled form (still or sparkling / gas or no gas for our continental friends). So there is a price on water. And if you ask me, it makes perfect sense. After all, while water is a crucial element in sustaining life, it is not free.
People keep on forgetting that nothing is free and whenever something is free, it is free to YOU, somebody else is paying for it. Also, unfortunately, most of the times, the "somebody else" is the poor who pay for it either in terms of bad water or water that is way too expensive.
So this interview of Craig Donohue, the chief executive of the Chicago Mercantile Exchange was very much along these lines. Some quotes:
Seismic shifts in the demand patterns of commodities around the world were, he said, creating “dramatic” transformation of the trading scene. The increasing use of corn as a fuel for cars, he said, was creating a “tremendous convergence” between energy and food markets.
Large corporations like Coca-Cola are already vowing to achieve “water neutrality” in their operations by replacing the water they use to make their products. Australia, which suffers from extreme drought in large portions of the country, has already created a vibrant market for buying and selling water entitlements.
Some believe that a water futures market could be set up to mirror carbon emissions markets, incentivising efficient use of the precious resource.
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