(This Q&A was first published by Stanford University on March 3, 2021.)
California water has joined gold, energy and bitcoin as a commodity whose future value can be traded on a financial exchange and the first market trades on water futures took place three months ago. The market, based on values determined by NASDAQ’s Veles Water Market Index, was hailed by some as a useful tool so California farmers can reduce the risk of drought-driven escalation in water costs. It was sharply criticized by others, from a United Nations representative to racial justice groups as potentially limiting access to something essential to life.
Buzz Thompson, a Stanford Law School professor and founding director of the Woods Institute for the Environment, now directs the Water in the West program. He founded the law school’s Environment and Natural Resources program and served as a special master for the United States Supreme Court in Montana v. Wyoming, an interstate water dispute involving the Yellowstone River.
(Continue reading the op-ed on Stanford University’s page here)