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Vol. 1, No. 3: August 13, 2007
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Welcome to the third edition of the Ecosystem Marketplace's monthly newsletter, Water, Environment and Trading (WET). While we're appreciating water at take a swim in or quench thirst in the heat of the Northern Hemisphere summer, some of the biggest news in water markets this month is coming from "Down Under." In mid- July, NSX Ltd. announced purchasing the Waterexchange Ltd for $10.75 million and plans to begin trading in water-based futures and derivatives in the next six months. Explaining how the new system will work Waterexchange founder and head Brian Peadon noted, "So in theory a farmer will come in and take a contract position for the life of his crop...But a day trader might see a big storm front coming across the basin and take a market position against that for the next hour." This month Queensland's Water Minister Craig Wallace announced an amendment to the Border Rivers Water Resource plan allowed for water trading between Queensland and New South Wales for the first time. This development will hopefully enable water users, especially farmers to make more efficient use of their water allocations.
Read on to for more news from both hemispheres.
— The Ecosystem Marketplace Team
For questions or comments, please contact newsletter@ecosystemmarketplace.com
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NSX Acquires Waterexchange for First Australian Water-Based Trading
In mid-July, the Waterexchange Ltd was acquired by the operator of the Newcastle and Bendigo stock exchanges, NSX Ltd, for $10.75 million. Almost 14 years old, the Waterexchange has about 20,000 Australia clients, usually farmers, who use the exchange to physically trade water between one another. This move establishes Australia's first water-based derivative products trade. The Waterexchange and NSX also announced plans to soon launch a carbon emissions trading platform. Trading in water-based futures and derivatives trading will begin before the end of the year. NSX, with approximately 110 securities and total value of $1 billion, recently signed up two companies to a new sustainability board which will be officially launched on September 14, 2007 by former US vice-president Al Gore in Sydney.
– View The Sidney Morning Herald article
– View The Age article
Thumbs Up: Interstate Water Trading for Queensland and New South Wales
Earlier this month, an amendment to the Border Rivers water resource plan allowed for water trading between Queensland and New South Wales for the first time. This development will hopefully enable water users, especially farmers to make more efficient use of their water allocations. Specifically, the amendment allows Queensland irrigators to either sell or lease all or part of their allocation in either Queensland or New South Wales. Also, Queensland irrigators can enter the New South Wales market to buy more water if they are looking to expand their production, and vice versa.
– View the Media Newswire article
The Gulf: Prediction of Record Dead Zone
Point to Non-point Trades Stir Debate about VA and PA Programs
The effects of some nutrient reductions efforts in the Chesapeake Bay area today may not be realized for years due to the varied timeframes it takes nutrients to pass through slow-moving groundwater conduits. Some nutrients released by non-point sources can reach streams in a matter of weeks or months. However, the USGS estimates that it takes, on average, a decade before half of the nitrogen that sinks into groundwater seeps into a stream, and more time for the other half. This 'groundwater lag' raises concerns as some states look at nutrient trading regimes that would allow point to non-point trades, rather than solely point-to-point trades. The Pennsylvania and Virginia trading programs, recently created programs that allow point-to-non-point source trades. Both programs use the Watershed Model, a model for developing reduction strategies to meet annual caps, though the model doesn't directly account for the groundwater lag.
– View the Bay Journal article
Reductions in Nutrients and Greenhouses Go Hand-in-Hand, Report Says
In a recently released report, the Chesapeake Bay Foundation states that the agricultural community surrounding the bay can and should do more to reduce the release of nutrients into the Bay and greenhouse gases into the atmosphere. The report states that the watershed's ecosystem, and those that rely on it for livelihoods, will be increasingly impacted by warmer air and water temperatures and higher sea levels. The organization promotes more "conservation agriculture," which includes techniques such as low-till or no-till farming. Research from Yale University shows that adoption of such techniques across the watershed could remove at least 4.8 million metric tons of carbon from the atmosphere every year through "carbon sequestration."
– View the Chesapeake Bay Foundation article
– View the Chespeake Bay Foundation Report, Climate Change and the Chesapeake Bay (pdf)
Bay Region States May Receive Farm Bill Funds for Conservation
Rep. Peterson (D-MN), chairman of the House Agriculture Committee, offered a 2007 federal Farm Bill version that marks $150 million to Chesapeake Bay region farmers for conservation programs. The bill would mandate the government to pay between 50 and 65 percent of the cost of efforts to reduce water pollution. Farmers can opt to utilize the funding for programs that reduce nutrient runoff into the bay.
– View the Chesapeake Bay Foundation article
Ethanol Dilemma: Increased Production without Increased Pollution Protection
Increased corn production for ethanol as an alternative energy to fossil fuels must be coupled with increased pollution reduction measures, states a new report by regional agriculture and environmental scientists. The report, Biofuels and Water Quality – Meeting the Challenge & Protecting the Environment, finds that increased corn production could annually produce an additional 8-16 million pounds of nitrogen pollution and 0.8-1.6 million pounds of phosphorus pollution. The report states that expansion of cover crop implementation, and nutrient management plans could curb those increases.
– View the Chesapeake Bay Foundation article
– View the full report Biofuels and Water Quality – Meeting the Challenge & Protecting the Environment
China's Double-Edged Sword: Improvement of Water Supplies without Accounting for Greening Costs
This summer China has both promulgated new restrictions and policies protecting its water bodies and rejected using green Gross Domestic Product (GDP) calculations, a way to better quantify the economic impacts of national environmental degradation. After three major lakes were affected by algae blooms in the last 2 months - Chao Lake, Tai Lake and Dian Lake – affecting the citizens near or reliant on the lakes for drinking water, the State Environmental Protection Administration chief Zhou Shengxian stated this month that strict measures must be introduced assuage public concerns about water safety. Ironically enough, the Chinese government has postponed work on calculating its green GDP, which could aid the country identify its worst environmental problems. A 2004 report found that environmental degradation in 2004 cost 511.8 billion yuan (US$67.7 billion) or 3.05 percent of GDP.
– View the Planet Ark article
– View the Asia News article
– View the South China Post article
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