Investments in California’s water may help lower costs during drought
Climate change and extreme weather events are forecast to further reduce water supplies in the American Southwest, and a new futures market could allow water users to recoup losses if the price of water spikes. The futures market is the first of its kind, allowing investors and farmers alike to bet on how much water in California will cost on a future date. Water users buy the futures contract to avoid risk and hedge against rising water prices affected by things such as droughts.