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Water, The Most Basic and Essential Resource, is Now Just Another Wall Street Commodity

Investors can now trade water futures for the first time ever, as fear about the worldwide scarcity of water grows.

Elias Marat

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Water may be the basis for all life on earth, but it may soon become one of the hottest commodities on the Wall Street futures market due to its scarcity as a good.

Water will soon see its price fluctuating like other commodities including wheat, gold, and oil, now that the CME Group has launched futures contracts tied to the spot price of water.

The Nasdaq Veles California Water Index, which measures the volume-weighted average price of water in California’s five primary watersheds, began trading under the ticker NQH20 on the Chicago Mercantile Exchange on Monday.

On Tuesday morning, it was trading at about $486.53 per Acre Foot ($/AF).

The contracts will let both investors and farmers bet on future prices of the precious liquid with contracts tied to the $1.1 California spot water market, reports Business Insider.

Historically, this is the first time that water has been traded this way.

In the last year, the price of water in California has doubled, increasing fears of the scarcity of this crucial resource. Market analysts claim that the arrival of water futures to the international market will allow better management of the risks tied to any shortage of this good.

For example, those who are in need of extra water in a drought-stricken year – when prices are much higher – will now be able to bet on futures contracts to offset the higher prices they would have to pay in the water market in the future.

Large agricultural firms and municipalities would also theoretically have the ability to protect themselves from large swings in the price of the commodity.

“The NQH20 futures will be an innovative tool to provide agricultural, commercial, and municipal water users with greater transparency, price discovery, and risk transfer, which can help to more efficiently align supply and demand of this vital resource,” said the CME Group.

The financial group touted the NQH2O index as the likely benchmark for global water markets.

The new futures market also creates the possibility that water will be the subject of cut-throat speculation from financial giants, including major banks and hedge funds.

“Climate change, droughts, population growth, and pollution are likely to make water scarcity issues and pricing a hot topic for years to come,” RBC Capital Markets managing director and analyst Deane Dray told Bloomberg. “We are definitely going to watch how this new water futures contract develops.”

China and the United States are the world’s top consumers of water, with California accounting for some 9 percent of the nation’s daily consumption.

California’s water market is about four times bigger than that of any other state, with water transactions totaling $2.6 billion between 2012 and 2019.

In addition to being an agricultural giant where high-value crops like almonds and pistachios regularly require massive amounts of water, California is also filled with oil production facilities that use huge amounts of water while fracking for oil and gas.

However, the state is frequently hit with major droughts, leading to volatility in the price of the resource, reports CNN.

According to the United Nations, about 2 billion people live in countries where basic access to water is a serious problem. In the next few years, up to two-thirds of the planet could experience water shortages, leading to the displacement of millions of people.

The precious liquid has been excessively exploited by the mining sector and huge industries, while climate change has also been a driver of the increasing scarcity of water.

Animals

As Marine Life Flees the Equator, Global Mass Extinction is Imminent: Scientists

Elias Marat

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The waters surrounding the equator are one of the most biodiverse areas in the globe, with the tropical area rich in marine life including rare sea turtles, whale sharks, manta rays, and other creatures.

However, rampant rises in temperate have led to a mass exodus of marine species from the sensitive region – with grave implications for life on earth.

While ecologists have long seen the thriving biodiversity of equatorial species holding constant in the past few centuries, a new study by Australian researchers published in The Conversation has found that warming global temperatures are now hitting the equator hard, potentially leading to an unprecedented mass extinction event.

The researchers from the Universities of Auckland, Queensland, and the Sunshine Coast found that as waters surrounding the equator continue to heat up, the ecosystem is being disrupted and forcing species to flee toward the cooler water of the South and North Pole.

The massive changes in marine ecosystems that this entails will have a grave impact not only on ocean life – essentially becoming invasive species in their new homes –  but also on the human livelihoods that depend on it.

“When the same thing happened 252 million years ago, 90 percent of all marine species died,” the researchers wrote.

To see where marine life is headed, the researchers tracked the distribution of about 49,000 different species to see what their trajectory was. The global distribution of ocean life typically resembles a bell curve, with far fewer species near the poles and more near the equator.

However, the vast alteration of the curve is already in motion as creatures flee to the poles, according to a study they published in the journal PNAS.

These changes augur major disruptions to global ecosystem as marine life scrambles in a chaotic fight for food, space, and resources – with a mass die-off and extinction of creatures likely resulting.

The research underscores the dire need for human societies to control rampant climate change before the biodiversity and ecological health of the planet is pushed past the point of no return.

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Environment

Japan Says Dumping Fukushima Radioactive Water in Pacific Ocean is Now “Unavoidable”

Elias Marat

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While Japan last month marked the 10th anniversary of the devastating 2011 Tohoku earthquake and tsunami with solemn ceremonies, the government has also been stressing the successes of its recovery efforts in the country’s northeast.

In truth, however, the country is still coping with the aftermath of the Fukushima Daiichi disaster, which has already cost Japan trillions of yen and whose exclusion zone will require up to 40 more years to fully rehabilitate.

And with contaminated water continuing to build up at the ruined Fukushima Daiichi Nuclear Power Plant, Prime Minister Yoshihide Suga says that the government must finally begin dumping it into the Pacific Ocean.

With nuclear waste and fuel rods still contaminating the area, over one million tons of radioactive waste water continue to seep from the facility, according to The Japan Times, forcing authorities into what Suga describes as the “unavoidable” position of having to dump the water.

Officials claim that the water would be purified to the maximum extent possible, but environmentalist groups like Greenpeace warn that the water contains hazardous material that could damage human DNA and the health of marine life.

Fishers also fear that consumers will refuse to buy fish caught in contaminated waters, worsening their plight amid a restriction of imports from Fukushima prefecture imposed by 15 countries and regions.

Regardless, authorities argue they must deal with the cards that have been dealt.

“What to do with the [treated] water is a task that the government can no longer put off without setting a policy,” Japanese trade minister Hiroshi Kajiyama said on Wednesday.

Suga is expected to formally decide on the course of action by next Tuesday. If he proceeds, authorities will dilute tritium to 2.5 percent of the maximum concentration allowed by the country before it is dumped.

But while Japanese officials say that the water will be safe, it remains an open question whether people will trust their word.

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Environment

Crowds Flock to Lava-Spewing Volcanoes in Italy, Iceland and Guatemala to Get Closer View

Elias Marat

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The year 2021 has so far been a particularly active time for volcanic eruptions. In February and March, three spectacular volcanic eruptions have occurred: the Fagradalsfjall volcano in Iceland, Mount Etna in Italy and Pacaya in Guatemala.

In each case, the eruptions have drawn large crowds of curious onlookers and sightseers.

In vivid video captured at Fagradalsfjall volcano on April 1, lava can be seen being spewed as amazed onlookers can be heard in the background. According to local reports, tens of thousands of people have been drawn to the area to view the eruption.

Iceland’s authorities are not anticipating evacuations due to the mile-and-a-half distance from the nearest road.

“We are monitoring the situation closely and as of now it is not considered a threat to surrounding towns,” said Iceland Prime Minister Katrín Jakobsdóttir. “We ask people to keep away from the immediate area and stay safe.”

Italy and Guatemala have also experienced a few volcanic eruptions this year.

On March 7, Sicilian villages were showered with ash and lava stone following the eruption of Mount Etna, which began its highly active phase in February.

The Pacaya volcano lying 30 miles south of the Guatemalan capital has also been extremely active since February.

Pacaya’s peak typically attracts tourists, but hikes are temporarily on hold due to the uptick in activity. Pacaya has a clear view of the nearby Volcano of Fire, whose lava flows in a 2018 eruption killed at least 110 people and left rougly 200 missing.

While volcano tourism provides a steady source of income for villages like nearby San Francisco de Sales, locals must balance this with the need to ensure their long-term safety.

So far, however, Pacaya has not yet injured locals.

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