How Would You Trade Water?

Business Insider re-ran an blog post on the potential grown of the water market over that of crude oil.

Would the Water market be like the Carbon market – where nations would agree to conserve/minimize usage and buy/sell usage offsets?

Or would it be like the CBOT Soybean contract, where you have several deliverable grades of beans that can be delivered against the contract for a premium or discount to settlement depending on the grade? [#2 Yellow at contract price, #1 Yellow at a 6 cent/bushel premium, #3 Yellow at a 6 cent/bushel discount]

What would you use for the grading…fluoride content? Crude oil parts per million? Or in Los Angeles, the % content of those naturally occurring grey “flavor crystals” that appear in your tap water?


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