The future of water - from a fundamental right to a commodity

On December 7, 2020, the CME Group - the world's leading derivatives marketplace - launched the world's first "futures contract" for trading water. Futures contracts have long existed for gold, oil, wheat and soybeans. They act as a form of risk management in that sellers assure buyers that they will be able to purchase an agreed quantity of the commodity in question at a predetermined price on a fixed date in the future. According to CME, the aim is to help water users - especially farmers - to manage their risk and better balance the increasingly difficult to predict future water supply and demand requirements due to extreme weather events. However, water futures are also subject to criticism, as it was only ten years ago that the UN General Assembly recognized clean drinking water as a human right. The consequences of trading in water futures are not yet foreseeable. Critics and environmental activists fear a repeat of the food market speculation bubble of 2007/2008. So what happens when the most essential raw material on earth, a globally recognized human right, becomes an object of speculation on the financial market? ORF meteorologist Marcus Wadsak discusses this with Ulrich Kubinger (CEO VTA Group) and Klaus Gabriel (economic and social ethicist "Money and Ethics").

17.05.2023