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Climate change

Congress Introduces Future of Water Act to Prevent Water Trading and Protect Public Resource

Strategic Insights

— 1 min read

Representatives Ro Khanna and Elizabeth Warren have introduced the Future of Water Act, aimed at prohibiting futures trading of water or water rights, protecting the country's water supply, and safeguarding it from corporate speculation. The bill comes as the United Nations Special Rapporteur on the Human Right to Water has condemned the trading of water futures, warning of severe real-world price spikes due to market manipulation and speculation.

Key Takeaways:

  • The Future of Water Act seeks to amend the Commodity Exchange Act to prohibit futures trading of water or water rights, preventing corporate speculation and price manipulation.
  • The bill aims to protect the country's water supply, a basic human right, from being treated as a commodity for Wall Street's financial gain.
  • Over 250 organizations have endorsed the Future of Water Act, including Food & Water Watch, Friends of the Earth United States, and the Institute for Agriculture and Trade Policy.
  • The legislation's introduction comes as the Chicago Mercantile Exchange (CME) has certified the world's first water futures contracts, allowing investors to purchase and sell futures contracts based on water rights prices in California.
  • The CFTC has allowed water futures contracts to be traded despite underlying cash market opacity, making it susceptible to manipulation.
  • Large corporations and investors are interested in financial derivatives based on water and water rights, which could lead to physical water hoarding and price increases.

Statistics:

  • The Chicago Mercantile Exchange (CME) has certified the world's first water futures contracts.
  • Over 250 organizations have endorsed the Future of Water Act.
  • 13 House cosponsors include Jamaal Bowman (D-NY), Cori Bush (D-MO), and Alexandria Ocasio-Cortez (D-NY).
  • 5 Senate cosponsors include Ed Markey (D-MA), Jeff Merkley (D-OR), Bernie Sanders (I-VT), and Sheldon Whitehouse (D-RI).

Sources:

  • "Rep. Khanna and Sen. Warren Introduce Future of Water Act to Ban Water Futures Trading" (Source: Office of Representative Ro Khanna)
  • "UN Special Rapporteur Urges Ban on Water Futures Trading" (Source: Food & Water Watch)
  • "Industry group welcomes Future of Water Act" (Source: Institute for Agriculture and Trade Policy)
  • "Future of Water Act" (Source: Representative Ro Khanna's website)

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