September 15, 2008
Those of you who enjoyed a proper weekend without the intrusions and distractions of work, the Internet, or a stray newspaper woke this morning to the stunning news that two of the largest and most revered investment banks in the world were on the brink of insolvency. Add to that the desperate state of one of the largest insurance companies in America and you’ve got a lot of hand-wringing going on in the world financial markets.
These are uncertain times, to be sure. And the events of the past three days have cast new light on the stability, or lack thereof, of the financial systems that underpin global commerce. But what’s this got to do with water and the oceans?
The successive speculative bubbles that fueled (and then gutted) the technology and housing markets (and one could argue for oil here as well) were the result of complex financial constructs that distorted the reality of supply and demand in the markets. That is not to say that Wall Street is entirely to blame. We were all complicit in these distortions, individuals and banks, from London to Tokyo to Shanghai. Nobody likes to be left out of a bubble.
With regional water scarcity currently hitting some parts of the world hard, the idea of new pricing structures, water futures trading, and other mechanisms of finance playing a role in alleviating, or at least redistributing, global water supplies has been gaining traction. In principle, these concepts are sound. They are based on the belief that if water were to be priced as a global commodity, with that price being tied to supply and demand, it would create new efficiencies in global distribution and eliminate waste in regions that enjoy a surplus. (To some extent this is already done in the form of the bottled water industry.)
But if these pricing structures are to be adopted, they must be carefully crafted to prevent the kind of supply disruptions and wild price swings that plague other commodities that trade on global markets. Paying $150 for a barrel of oil is a major financial inconvenience and can be devastating to energy-intensive businesses. But imagine the global consequences of a speculative bubble that quickly drives up the price of water.
This is just one of the reasons why we are in dire need of more accurate information about water. We know that we have enough water on the planet for all our needs, but where is it? How are the routes it takes changing? Where is it being wasted? How is it being consumed? Only in a world in which these questions and others can be answered with precision can we even consider setting global prices on such a critical resource.
CORRECTION: In a blog entry dated June 6, 2008, we mistakenly characterized data tethering as a service that allows an individual to “know where a piece of personal information about them comes from and where it goes throughout its lifetime.” This is incorrect. Data tethering actually ties the original record, or master copy, to all subsequent copies of the data. Even if the data is passed along an infinite amount of times, one change in the master copy is then reflected throughout the data chain. Apologies to Jeff Jonas, Chief Scientist, Entity Analytics, IBM Corporation, who spoke about data tethering at the Vancouver Deep Dive in early June. Here is a link to Jonas’ explanation of data tethering at his blog.
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The concept of pricing water as a resource brings up the concept of who actually owns the water resource. The concept of ownership of water will be of critical importance in the future. Will the owner of the wateshed were the water falls own the water? If this water enters the groundwater will the owner be the person who pumps the water resource? If it enters a stream is it free for all?
What happens if the water in the atmosphere is intercepted by clouding seeding? Is this stealing water resources from the groups further down the atmospheric streams...
This all highlights the issue of who actually owns a "global" resource...
Posted by: Ned Bader | Sep 15, 2008 3:54:02 PM
The doctrine of Trust and ecological stewardship will need to be understood and put into action. Can anyone 'own' water or rather should anyone 'own' water? How can community rights over it be defined? What is an individuals right to water? What is her entitlement? What are the rights of others than human beings? How do we create a framework for community management of a scarce resource? Questions, questions.
Posted by: Vishwanath | Sep 21, 2008 2:22:36 AM
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