Mammoth Trading president and cofounder Richael Young was among a select number of individuals invited to speak at the White House Water Summit held on World Water Day. Richael’s message was one of focusing on demand-side rather than supply-side management, and using water markets as a tool to cope with water scarcity. She highlighted some of the challenges to building water markets:
- Markets must reflect geophysical realities
- Markets must prevent third-party impacts
- Markets require strong monitoring and enforcement
- Market participation is influenced by perceived fairness, confidentiality, and trust
To make markets most effective, markets should be a public-private partnership (PPP) where water districts retain control over the permitting and regulatory aspects and private entities handle the financial aspects, including operating the clearinghouse and transferring money. Richael announced two such PPPs, where Mammoth Trading is partnering with the local regulatory authority to launch smart markets for water leasing. These plans were also released in the White House Commitments to Action (page 34):
Mammoth Trading is launching two new trading markets for water leasing in over 500,000 acres of irrigated farmland: (1) for groundwater trading in western Nebraska; and (2) for surface-water trading in central Washington State. These markets, which will be set up for municipalities and communities for free, will seek to leverage the power of computer optimization to automate the process of checking complex regulatory rules for trading and to generate economic gains among participants. By monetizing the value of conserved water, water leases generate a potential new revenue for water users and reward innovation in water use at the farm level. Mammoth Trading grew out of NSF- and USDA-funded research, which was commercialized through the NSF Innovation Corps.
To watch the White House Water Summit, or to hear Richael’s message in full about water scarcity and markets, watch the recording on YouTube. Richael’s talk begins at 02:34:18.
Thanks for tuning in! For other highlights and readings related to water markets on World Water Day, please see:
- Drought Resilience Federal Action Plan to include market-based strategies (Goal 5, page 12)
- The National Science Foundation highlighted Mammoth Trading’s smart markets as innovative solutions to water management
- White House World Water Day Press Release
— Water in the West (@WaterintheWest) March 22, 2016
— UIUC Research Park (@UIResearchPark) March 23, 2016
— National Science Fdn (@NSF) March 22, 2016