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Water: Should access be privatized and sold to the highest bidder?

 

 

Hedge Funds and Mega-Drought: When Private and Public Collide (News, Switzerland)

 

"Suppose a mere ten-year drought was to begin in Los Angeles, also impacting the Central Valley and Sacramento. It would quickly spread through Las Vegas and Phoenix, all the way to West Texas. A horror scenario? Yes - if you don't own the water rights. In the American West, water rights are commercially available. In other words, rights to the water that descends on American land - or flows through, melts, or exists in any shape or form (from springs, for example) - can be purchased and then sold again to the highest bidder. . To such people, a drought will come in handy, because the value of water rights have been rising in price for years, as has the price of water.

 

By Patrik Etschmayer

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Translated By Stephanie Martin

 

September 18, 2014

 

News Switzerland Original Article (German)

In fact, the drought has already begun. The major sources of drinking water in the American southwest particularly the groundwater and water from the annual snowmelt from the Colorado River, are in free fall, so to speak.

 

A lack of snowfall in winter and record heat in summer put in question the long-term survival of the populations in California and West Texas. Limits on the agricultural use of groundwater have already been imposed and the supply of winter vegetables in the United States will be under serious threat if the Imperial Valley cannot make up for dwindling water supplies from the Colorado River, although others will likely run out first.

 

Forecasts of major periods of drought

 

Unfortunately, the likelihood of a drought is alarmingly high. A new study by researchers at Cornell University in New York and the University of Arizona corrects previous forecasts of ten-year drought from just under 50 percent to over 80 percent. The study also found that the probability of a 35-year mega-drought remains over 33 percent, and that the probability of a 50-year dry period continues at five to ten percent. These numbers should not be trifled with: If the chances of being run over while crossing the street were equally as high, no one would dare enter a pedestrian crosswalk.

 

The reasons for this risk of drought are varied, and anthropogenic [human-caused] climate change is only one of them. Important clues come from paleoclimatology, where indications have even been found of a 100-year drought in this region.

 

The demise of the early Maya and the Toltecs

 

The demise of the early Maya and Toltec civilizations a bit further south can also be traced to a mega-drought. When the Spanish conquistadores conquered the Aztecs, they faced off with an opponent already weakened by a five-year drought. This had not only economic but social implications, as the "god kings" were apparently unable - depite human sacrifices, to persuade the gods send life-saving rain.

 

These projections, based on the best data currently available and underpinned by the historical record, alone should call the state into action, as should, by the way, defending against asteroids. Or is this more of a case for private industry, since, according to the current mood, the private sector does everything better? Justified concerns are well founded, as can be seen in areas where the privatizations of government functions have already begun.

 

The example of privatized prisons

 

In the United States, cost arguments have been used to privatize the prison system in many places. Companies operating there argue that they do everything the government does provide accommodation, food, security, and rehabilitation, only cheaper and better. Really? Marketing brochures promise potential investors that the objective of these prisons is to be as full as possible, which allows them to make maximum profit. To achieve this, assurances are given that rehabilitation, which should be one of the paramount goals of a prison, in fact never occurs. Of course, this is not the formulation that is used. Rather, high rates of "relapse" are guaranteed!

 

The goal of these companies is to make sure that prison occupants remain criminals - which undoubtedly corresponds with capitalist profit maximization, but hardly with the objectives of society. Not least because in the United States, the ratio of the total population in prison is much higher than in other civilized country - convicted criminals are good business.

 

Cities at risk

 

But back to the drought - say a mere ten-year drought was to occur, many major cities would be fundamentally compromised. Say it begins in Los Angeles, also impacting the Central Valley and Sacramento. It would quickly spread through Las Vegas and Phoenix, all the way to West Texas. A horror scenario? Yes - if you don't own the water rights.

 

http://worldmeets.us/images/farmer-drought-midwest_pic.jpg

 

In the American West, water rights are commercially available. In other words, rights to the water that descends on American land - or flows through, melts, or exists in any shape or form (from springs, for example) - can be purchased and then sold again to the highest bidder. These rights were originally granted to settlers in the late 19th century. Today, however, they are bought up by water hedge funds from the settlers' descendants. To such people, a drought will come in handy, because the value of water rights have been rising in price for years, as has the price of water.

 

Entire rivers can be drained

 

Already there are fears that water will no longer reach the homes of poorer people and that instead, it will be purchased by large industrial groups. In addition, entire rivers can be drained thanks to water rights, and water simply passed on, which is to say, sold. As a result, there is likely to be enormous ecological damage.

Posted By Worldmeets.US

 

The increasing scarcity of water due to drought is therefore almost a dream for water hedge funds, which have realized that there is NOTHING that can replace water. In areas with sufficient water supplies, profits are still possible by controlling water distribution. However, in areas where water scarcity already exists, there are two possibilities: On the one hand, water can be managed by organizations in the hands of citizens themselves; on the other, distribution can be left to market.

 

No one 'gives a shit' about the value of water

 

Market advocates have a strong argument in their favor: in many areas, even here, no-cost clean water is taken for granted. Most people, literally, don't give a shit about the value of water. In virtually every location in Switzerland, high-quality water is used to flush toilets, as opposed to so-called grey water, which is water that has already been used for hand-washing or bathing, for example, and then filtered. Here, large cities have the capacity and influence - through education, subsidies, laws and ordinances, to affect water use and ensure essential supplies in times of crisis.

 

On the other hand, when the Web site of the above-mentioned hedge fund mentions the value of water, it is not in reference to a long-term security of supply for all, but only for those who can afford it most likely at a very high price. This is logical, but also problematic. As with prisons, the interests of water entrepreneurs and those of society are in contradiction. Even if the situation improves, shortages would be the goal of such a fund - because that makes sense commercially.

 

If the feared drought were really to occur, however, this would put the American southwest to the ultimate test of compatibility between the interests of private profit and the basic needs of the public. Our examination of prisons doesn't bode well in this respect.

CLICK HERE FOR GERMAN VERSION

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Posted By Worldmeets.US September 18, 2014, 10:29am