Senator Warren and Rep. Khanna Reintroduce Bill to Stop Wall Street from Profiting Off Water and Water Rights

April 18, 2024

Senator Warren and Rep. Khanna Reintroduce Bill to Stop Wall Street from Profiting Off Water and Water Rights

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Washington, D.C. - Senator Elizabeth Warren (D-Mass.) and Representative Ro Khanna (D-Calif.) have re-introduced the Future of Water Act to amend the Commodity Exchange Act to prohibit the trading of water and water rights in commodity futures contracts.

Under current law, water prices are vulnerable to manipulation and speculation from futures markets. Without limitations on these markets, passive investors are incentivized to purchase acres of farmland purely for the commoditized water rights that accompany the land, giving control of the water futures market to individuals with no personal or commercial stake in it. This regime could lead to physical water hoarding and price increases, harming American families and farmers and incentivizing further farmland consolidation.

"Water is not a commodity for the rich and powerful to profit off of," Senator Warren said. "Representative Khanna and I are standing up to protect water from Wall Street speculation and ensure one of our most essential resources isn't auctioned off to the highest bidder."

"Access to clean, drinkable water is a basic human right," said Representative Khanna. "I'm proud to be introducing this legislation with Senator Warren that prioritizes human needs over corporate profits. Large companies and investors should not be allowed to use an essential, too often scarce, public resource for their own gain. We must stand together to protect our water."

The 2020 announcement of water futures trading opportunities received condemnation from the global water community, including the United Nations Special Rapporteur on the Human Rights to Safe Drinking Water and Sanitation who stated: "Water is already under extreme threat from a growing population, increasing demands and grave pollution from agriculture and mining industry in the context of worsening impact of climate change. . . I am very concerned that water is now being treated as gold, oil and other commodities that are traded on Wall Street futures market."

The Future of Water Act, which was first introduced in the 117th Congress, would:

1. Prohibit the trading of water and water rights in commodity futures contracts. The proposed bill would add "water and water rights" to the current list of prohibitions in the Commodity Exchange Act.

2. Protect American families, farmers, and ranchers from water price spikes. Wall Street's interest in financial derivatives based on water and water rights could lead to severe real-world water price spikes due to market manipulation and/or excessive speculation. Prohibition of water and water rights futures trading stops this dangerous speculation and protects American families, farmers, and ranchers.

Senate co-sponsors of this bill include: Senators Ed Markey (D-Mass.), Jeff Merkley (D-Ore.), and Bernie Sanders (I-Vt.).

House co-sponsors of this bill include: Representatives Alma Adams (D-N.C.), Jamaal Bowman (D-N.Y.), Cori Bush (D-Mo.), Andre Carson (D-Ind.), Bonnie Watson Coleman (D-N.J.), Jesus "Chuy" García (D-Ill.), Jahana Hayes (D-Conn.), Barbara Lee (D-Calif.), Eleanor Holmes Norton (D-D.C.), Alexandria Ocasio-Cortez (D-N.Y.), Ilhan Omar (D-Minn.), Mark Pocan (D-Wis.), Delia Ramirez (D-Ill.), Jan Schakowsky (D-Ill.), and Rashida Tlaib (D-Minn.).

The Future of Water Act of 2024 is endorsed by over 275 organizations including: Americans for Financial Reform, Center for Biological Diversity, Demand Progress, Demos, Food & Water Watch, Friends of the Earth United States, Greenpeace USA, Indigenous Environmental Network, National Family Farm Coalition, Network Lobby for Catholic Social Justice, Open Markets Institute, Progressive Democrats of America, Public Citizen, and Sunrise Movement.

"As Wall Street investors are scrambling to grab up dwindling water supplies, it is clearer than ever that water must be treated as a public trust resource, not a commodity for financial speculators," said Food & Water Watch Executive Director Wenonah Hauter. "We thank Senator Warren and Representative Khanna for their leadership to ban water futures trading and protect access to safe, affordable water for all."

Senator Warren fights for equitable access to natural resources and leads the charge in pushing federal agencies and regulators to act on climate and climate financial risk:

• In April 2024, Senator Elizabeth Warren (D-Mass.), Representatives Sean Casten (D-Ill.), and Veronica Escobar (D-Texas), led 23 colleagues in a letter to the Federal Acquisition Regulation (FAR) Council, composed of the Department of Defense (DoD), General Services Administration (GSA), and the National Aeronautics and Space Administration (NASA), urging them to finalize the Federal Supplier Climate Risks and Resilience Rule as quickly as possible.

• In March 2024, Senator Elizabeth Warren (D-Mass.), released a statement describing the Securities and Exchange Commission's (SEC) finalized climate risk disclosure rule as "the bare minimum."

• In February 2024, Senators Elizabeth Warren (D-Mass.) and Ed Markey (D-Mass.) announced $151 million in federal funding for Massachusetts from the Environmental Protection Agency, which will help invest in drinking water, wastewater, and stormwater infrastructure upgrades across Massachusetts.

• In September 2023, Senators Elizabeth Warren (D-Mass.), Bernie Sanders (I-Vt.), Martin Heinrich (D-N.M.), Ed Markey (D-Mass.), Sheldon Whitehouse (D-R.I.), and Jeff Merkley (D-Ore.) sent a letter to Secretary of the Treasury Janet Yellen and newly-appointed Treasury Climate Counselor Ethan Zindler, urging the Treasury Department (Treasury) to take key actions pertaining to climate and climate-related financial risk to avert the impending environmental and economic crises.

• In September 2023, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren urged Chair Gensler to quickly finalize a strong climate risk disclosure rule, reminding him that he has a mandate to protect investors and strong public support.

• In September 2023, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren highlighted the recent withdrawals of major insurance companies from states that have a high and growing risk of climate disasters, the impact of this insurance crisis on homeowners, and the need for increased transparency from insurance companies.

• In September 2023, Senators Warren, Chris Van Hollen (D-Md.), and Whitehouse sent a letter to Secretary Yellen and Federal Insurance Office (FIO) Director Steven Seitz calling on the FIO to finalize its proposal to collect data from major insurers to better assess the impact of climate change on insurance availability and affordability, including in communities that are most vulnerable to the effects of climate change.

• In March 2023, Senators Warren, Whitehouse, and Markey sent a letter to Secretary Yellen following Climate Counselor John Morton's departure and urging Treasury to take swift and aggressive action to tackle the climate crisis, which threatens our health, security, and financial system.

• In March 2023, Senators Warren, Whitehouse, and Representatives Dan Goldman (D-N.Y.) and Raskin and 47 of their colleagues sent a letter to SEC Chair Gary Gensler, urging him to protect investors and finalize a strong climate disclosure rule without further delay.

• In October 2022, Senators Elizabeth Warren (D-Mass.) and Cory Booker (D-N.J.) sent a letter to Commodity Futures Trading Commission (CFTC) Chair Rostin Behnam asking him to conduct a series of studies examining whether excessive speculation in key commodities markets - including natural gas, wheat, and oil - has contributed to higher prices of household necessities.

• In September 2022, at a hearing of the Senate Banking, Housing, and Urban Affairs Committee, Senator Warren called on SEC Chair Gary Gensler to protect investors and stand up to fossil fuel lobbying by issuing a strong climate risk disclosure rule quickly.

• In June 2022, Senator Warren led a comment letter with Senators Whitehouse and Brian Schatz (D-Hawaii) on the SEC's mandatory climate disclosure rule, highlighting several areas for improvement and key elements that the SEC should preserve in its final rule, including strong Scope 3 emissions disclosure requirements.

• In March 2022, Senator Elizabeth Warren (D-Mass.) and Representative Ro Khanna (D-Calif.) led a bicameral group of colleagues in introducing the Future of Water Act to amend the Commodity Exchange Act to prohibit futures trading of water or water rights and protect our country's water.

• In March 2022, Senator Warren led a letter with Senators Whitehouse and Schatz urging the SEC to require disclosure of anti-climate lobbying activities in the Commission's rule.

• In February 2022, Senator Warren led a letter to the SEC about the delayed release of the SEC's proposed climate change disclosure rule, urging them to act quickly to get a rule out.

• In August 2021, Senators Warren, Kirsten Gillibrand (D-N.Y.), and Chris Van Hollen (D-Md.) sent a letter to John Morton - the first Climate Counselor at the new Climate Hub at the U.S. Department of the Treasury - urging swift and aggressive action to tackle the climate crisis, a major threat to the country's health, security, and financial system.

• In July 2021, Senators Elizabeth Warren (D-Mass.), Cory Booker (D-N.J.), and Bernie Sanders (I-Vt.), reintroduced the Farm System Reform Act, a bill that would create a level playing field for independent family farmers and transform the broken system built by multi-national meatpacking companies.

• In April 2021, Senator Warren and Representative Sean Casten (D-Ill.) reintroduced the Climate Risk Disclosure Act of 2021 which would reduce the chances of environmental and financial catastrophe by requiring public companies to disclose more information about their exposure to climate-related risks.

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