Tag: water commodification

What happens when we treat water as a commodity?

Does water serve public needs and interests, or should it be a commodity available for private investment, ownership, and management?

Those who believe water should remain public are deeply troubled by this question. The investment community is increasingly interested in developing markets in water. In the year 2020, the transition from water as a public good to water as an attractive private investment entered a new phase, when the Chicago Mercantile Exchange added water to gold, oil, and wheat as a traded commodity. Cities and farmers can now buy futures in California’s water, betting on rising water prices based on an index that tracks the market price of the five largest water supplies in the state. Touted as a way to efficiently manage the state’s scarce water through market mechanisms, this approach alarms human rights advocates.

In response to the new water futures market, over five hundred human rights organizations (including FLOW) signed a petition to governments reading:

The impacts of “water markets” already implemented in several countries are catastrophic. In Chile, rivers are sold at auction and acquired by billionaires who use the water to mass-irrigate avocados or supply mines, while millions of people attempt to survive widespread drought caused by the water grabbing. In Australia, the water market, which is supposed to support the economy while preventing water wastage, ended up inciting investors and agriculture industrials to speculate, based on forecasts regarding shortages and future water prices, to the detriment of small-scale farmers’ access to water.

Because water is the source of life, it cannot be considered a commodity, nor a financial investment or an object of speculation. Given the threats posed by the pandemic and climate crisis, we must urgently realise this. Allowing the markets to dictate the way water is distributed and managed is unacceptable given human rights and is grossly irresponsible given the world’s perilous ecological and health situation.

The trend of treating water as a market commodity also concerns some Great Lakes experts, including Cameron Davis, a commission member of the Metropolitan Chicago Water Reclamation District of Greater Chicago. Formerly head of the nonprofit Alliance for the Great Lakes and senior advisor on Great Lakes in the Obama Administration, Davis won unanimous approval from his fellow Reclamation District commission members for a cautionary resolution on the commodification of water in June 2021. The resolution agrees that clean drinking water and sanitation are a human right. “[T]he value of water is immeasurable, as water shapes every component of our lives. Commodifying water improperly leads to neglect of this valuable resource, which ultimately leads to degradation of the environment and is a dominant element in global illness and famine.”

In an interview, Davis said, “the threat is in thinking about water as if it were any ordinary raw material. The reality is, we need water to survive and thrive. Even in our water-rich region, it’s taken for granted, so I thought a strong statement through the resolution would help articulate that water—before, during, and after we use it—deserves special attention.”

He added, “What we’re saying with this resolution is that the right to water and sanitation is every bit as critical as the right to free speech. Or the freedom to worship. Or the freedom of association.”

The Davis resolution was one of the first official government agency warnings about the danger of water commodification and the need to affirm access to clean, safe, and affordable water as a human right. The Traverse City Commission, at the request of FLOW, approved a similar resolution in December 2021.

The protection of millions of lives in this century will require the provision of water to those who have no access to it. Religious scholar Richard Hughes proposes that water should be considered part of the “sacramental commons” and adds, “Conserving water in reverence and sharing water in equity ennobles the human spirit. The crises of water scarcity, emerging in many places around the world both now and in the future, require that finite freshwater resources be protected by the public trust and neither be commodified nor privatized.”