AQUA INDEX

Abstract

A method and system for computing a stable index value of a regulated substance by computing a virtual value of the substance based on the value of a freely marketed product of the substance. Particularly the invention may be applied to develop a stable investment instrument for investing in fresh water.

Claims

1. A computer-implemented method of connecting traders to a water exchange, comprising: determining a first quantity of water utilized to produce a first quantity of a first substance; using a first data feed to constantly feed to one or more processors a varying parameter of the first substance; using one or more processors to repeatedly detect the varying parameter of the first substance in the first data feed and to receive at least once, in regard to the first substance, the first quantity of water utilized to produce the first quantity of the first substance; determining a second quantity of water utilized to produce a second quantity of a second substance; using a second data feed to constantly feed to the one or more processors a varying parameter of a second substance; using one or more processors to repeatedly detect the varying parameter of the second substance in the second data feed and to receive at least once, in regard to the second substance, the second quantity of water utilized to produce the second quantity of the second substance; using the one or more processors to repeatedly determine an index value of water applied to a particular amount of water based on the repeatedly varying parameter of the first substance, based on the first quantity of water utilized to produce the first quantity of the first substance, based on the repeatedly varying parameter of the second substance and based on the second quantity of water utilized to produce the second quantity of the second substance, using the one or more processors to continually adjust the index value of water applied to the particular amount of water based on changes in the constantly received varying parameter of the first substance and changes, if any, to the first quantity of water utilized to produce the first quantity of the first substance and based on changes in the constantly received varying parameter of the second substance and changes, if any, to the second quantity of water utilized to produce the second quantity of the second substance, having the one or more processors instruct a digital display device to display adjusted index values of water.

2. The method of claim 1, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water.

3. The method of claim 1, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on a geographical location of the particular amount of water.

4. The method of claim 1, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on a quality of the particular amount of water from a particular water source.

5. The method of claim 1, further comprising determining water quality based on an amount of one or more substances in a collateral or water asset comprising water, wherein the one or more processors are configured to determine a value of the collateral from the water quality of the collateral or water asset and from the index value of water or adjusted index values of water.

6. The method of claim 1, further comprising using the one or more processors to combine the index value of water with at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water.

7. A computer-implemented method of connecting traders to a water exchange, comprising: determining a first quantity of water utilized to produce a first quantity of a first substance; and determining a first water quantity constituent in the first quantity of the first substance; using a first data feed to constantly feed to one or more processors a varying parameter of the first substance; using one or more processors to repeatedly detect the varying parameter of the first substance in the first data feed and to receive at least once, in regard to the first substance, the first quantity of water utilized to produce the first quantity of the first substance and the first water quantity constituent in the first quantity of the first substance; determining a second quantity of water utilized to produce a second quantity of a second substance; and determining a second water quantity constituent in the second quantity of the second substance; using a second data feed to constantly feed to the one or more processors a varying parameter of a second substance; using one or more processors to repeatedly detect the varying parameter of the second substance in the second data feed and to receive at least once, in regard to the second substance, the second quantity of water utilized to produce the second quantity of the second substance and the second water quantity constituent in the second quantity of the second substance; using the one or more processors to repeatedly determine an index value of water applied to a particular amount of water based on the repeatedly varying parameter of the first substance, the first quantity of water utilized to produce the first quantity of the first substance, the first water quantity constituent in the first quantity of the first substance, and based on the repeatedly varying parameter of the second substance, the second quantity of water utilized to produce the second quantity of the second substance, and the second water quantity constituent in the second quantity of the second substance, using the one or more processors to continually adjust the index value of water applied to the particular amount of water based on changes in the constantly received varying parameter of the first substance and changes, if any, to one or both of (i) the first quantity of water utilized to produce the first quantity of the first substance and (ii) the first water quantity constituent in the first quantity of the first substance, and based on changes in the constantly received varying parameter of the second substance and based on changes, if any, to one or both of (i) the second quantity of water utilized to produce the second quantity of the second substance and (ii) the second water quantity constituent in the second quantity of the second substance, having the one or more processors instruct a digital display device to display adjusted index values of water.

8. The method of claim 7, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water.

9. The method of claim 7, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on a geographical location of the particular amount of water.

10. The method of claim 7, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on a quality of the particular amount of water from a particular water source.

11. The method of claim 7, further comprising determining water quality based on an amount of one or more substances in a collateral or water asset comprising water, wherein the one or more processors are configured to determine a value of the collateral from the water quality of the collateral or water asset and from the index value of water or adjusted index values of water.

12. The method of claim 7, further comprising using the one or more processors to combine the index value of water with at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water.

13. A computer-implemented method of connecting traders to a water exchange, comprising: utilizing a first quantity of water to produce a first quantity of a first substance; and determining a first water quantity constituent in the first quantity of the first substance; using a first data feed to constantly feed to one or more processors a varying parameter of the first substance; using one or more processors to repeatedly detect the varying parameter of the first substance in the first data feed and to receive at least once, in regard to the first substance, the first quantity of water utilized to produce the first quantity of the first substance and the first water quantity constituent in the first quantity of the first substance; utilizing a second quantity of water to produce a second quantity of a second substance; and determining a second water quantity constituent in the second quantity of the second substance; using a second data feed to constantly feed to the one or more processors a varying parameter of a second substance; using one or more processors to repeatedly detect the varying parameter of the second substance in the second data feed and to receive at least once, in regard to the second substance, the second quantity of water utilized to produce the second quantity of the second substance and the second water quantity constituent in the second quantity of the second substance; using the one or more processors to repeatedly determine an index value of water applied to a particular amount of water based on the repeatedly varying parameter of the first substance, the first quantity of water utilized to produce the first quantity of the first substance, the first water quantity constituent in the first quantity of the first substance, and based on the repeatedly varying parameter of the second substance, the second quantity of water utilized to produce the second quantity of the second substance, and the second water quantity constituent in the second quantity of the second substance, using the one or more processors to continually adjust the index value of water applied to the particular amount of water based on changes in the constantly received varying parameter of the first substance and changes, if any, to one or both of (i) the first quantity of water utilized to produce the first quantity of the first substance and (ii) the first water quantity constituent in the first quantity of the first substance, and based on changes in the constantly received varying parameter of the second substance and based on changes, if any, to one or both of (i) the second quantity of water utilized to produce the second quantity of the second substance and (ii) the second water quantity constituent in the second quantity of the second substance, having the one or more processors instruct a digital display device to display adjusted index values of water.

14. The method of claim 13, further comprising determining water quality based on an amount of one or more substances in a collateral or water asset comprising water, wherein the one or more processors are configured to determine a value of the collateral from the water quality of the collateral or water asset and from the index value of water or adjusted index values of water.

15. The method of claim 13, further comprising using the one or more processors to combine the index value of water with at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water.

16. The method of claim 13, further comprising using the one or more processors to determine, in combination with the index value of water, a market value of a portion of the particular amount of water based also on at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water.

17. A computer-implemented method of connecting traders to a water exchange, comprising: at least one of (a) determining a first quantity of water utilized to produce a first quantity of a first substance; and (b) determining a first water quantity constituent in the first quantity of the first substance; using a first data feed to constantly feed to one or more processors a varying parameter of the first substance; using one or more processors to repeatedly detect the varying parameter of the first substance in the first data feed and to receive at least once, in regard to the first substance, at least one of the first quantity of water utilized to produce the first quantity of the first substance and the first water quantity constituent in the first quantity of the first substance; at least one of (a) determining a second quantity of water utilized to produce a second quantity of a second substance; and (b) determining a second water quantity constituent in the second quantity of the second substance; using a second data feed to constantly feed to the one or more processors a varying parameter of a second substance; using one or more processors to repeatedly detect the varying parameter of the second substance in the second data feed and to receive at least once, in regard to the second substance, at least one of the second quantity of water utilized to produce the second quantity of the second substance and the second water quantity constituent in the second quantity of the second substance; using the one or more processors to repeatedly determine an index value of water applied to a particular amount of water based on the repeatedly varying parameter of the first substance, based on at least one of (i) the first quantity of water utilized to produce the first quantity of the first substance, and (ii) the first water quantity constituent in the first quantity of the first substance, based on the repeatedly varying parameter of the second substance and based on at least one of (i) the second quantity of water utilized to produce the second quantity of the second substance, and (ii) the second water quantity constituent in the second quantity of the second substance, using the one or more processors to continually adjust the index value of water applied to the particular amount of water based on changes in the constantly received varying parameter of the first substance and changes, if any, to the at least one of (i) the first quantity of water utilized to produce the first quantity of the first substance and (ii) the first water quantity constituent in the first quantity of the first substance, and based on changes in the constantly received varying parameter of the second substance and based on changes, if any, to the at least one of (i) the second quantity of water utilized to produce the second quantity of the second substance and (ii) the second water quantity constituent in the second quantity of the second substance, using the one or more processors to combine the index value of water with at least one of (i) a quality of the particular amount of water from a particular source and (ii) a geographical region or location of the particular amount of water, and having the one or more processors instruct a digital display device to display adjusted index values of water.

18. The method of claim 17, further comprising determining water quality based on an amount of one or more substances in a collateral or water asset comprising water, wherein the one or more processors are configured to determine a value of the collateral from the water quality of the collateral or water asset and from the index value of water or adjusted index values of water.

Description

BRIEF DESCRIPTION OF THE DRAWINGS

[0039] Various embodiments of a method and system for investment are herein described, by way of example only, with reference to the accompanying drawings, where:

[0040] FIG. 1 is an illustration of an embodiment of an investment instrument;

[0041] FIG. 2 is a generalized flowchart of a method of marketing a commodity;

[0042] FIG. 3 is an illustration of a computation of a price index;

[0043] FIG. 4 is a generalized flowchart of a method of investing.

DESCRIPTION OF THE PREFERRED EMBODIMENTS

[0044] The principles and operation of a method and system for investment according to various embodiments may be better understood with reference to the drawings and the accompanying description.

[0045] Referring now to the drawings, FIG. 1 is an illustration of a financial instrument for investing in fresh water. Collateral 101 is a large body of fresh water owned by a municipality 102 (for example municipality 102 may be the state of Michigan and collateral 101 a lake). The substance of value in collateral 101 is fresh water. It will be understood to one skilled in the art, that although the water in collateral 101 has significant value and is easily available, nevertheless municipality 102 cannot be sell outright the water in collateral 101 due to legal limitations and limitations to pumping rates and the like. Nevertheless, Municipality 102 needs revenue and capital for development projects (including projects to protect or promote use of collateral 101 for example sewage treatment plants or building a marina or building a pumping station). Therefore municipality 102 markets water rights via a broker 120 and receives a commission as well as credits that can be used as security for loans.

[0046] The value of water in collateral 101 is difficult to evaluate because water trade is regulated by government legislation, licensing, official monopolies, taxes and subsidies. Therefore water is not freely marketable and has no consistent price. Therefore, broker 120 employs a standardized index 130, which is used to compute an index value 104 of water (for example $1.07/m.sup.3 as illustrated in the figure). In order to compute such a value broker 120 bases computations on the value of water in various localities as well as the virtual value of water in freely marketable products that contain water or utilize water in their production (examples are described herein below). Index values are stored in a memory of a desktop computer and calculated by the processor of the computer. Data for determining market shares and prices of products comes for statistics available over the Internet (for example statistics may be acquired from web sites associated with commodities markets, futures markets, stock exchanges [for example at N.Y., London, Tokyo]) and therefore can be updated easily in real time. Alternatively, statistics may be updated from periodically from published statistics or from statistics released from a government agency.

[0047] Broker 120 issues a certificate 106 (alternatively another financial instrument can be used for example a bond, a share, a stock, a future) for the water of collateral 101 and sells certificates 106 according to index value 104. In the example of FIG. 1, since index value 104 is $1.07/m.sup.3 the broker 120 sells certificate 106 for 1000 m.sup.3 for $1070 plus a 2% commission. An Investor 108 (who bought certificate 106) may redeem certificate 106 by requesting that municipality 102 deliver 1000 m.sup.3 of water to investor 108 (investor 108 being responsible for transportation and handling cost), or investor 108 may hold onto certificate 106 assuming that index value 104 will rise and then investor 108 will sell certificate 106 to another investor (possibly via broker 120) and collect a profit (minus any brokerage charges).

[0048] FIG. 2 is a generalized flow chart of a method marketing a commodity. A broker searches for a resource that is under capitalized. For example there is a large quantity of fresh water available in the world and a need for the water but not enough capital to develop or even protect this resource. Therefore the broker chooses (block 211) to market fresh water. The broker must now locate (box 213) fresh water rights that can be acquired as collateral. In the example of FIG. 2 the broker finds that in Brazil there are a lot of natural lakes having large quantities of accessible water. Then it is necessary to define (box 215) a region of evaluation. For example it is possible to evaluate the water according to the value of water in Mexico and the Midwest United States (where there is a water shortage and water from the Amazon can easily be shipped) alternatively it is possible to evaluate the water according to the world price of water. The broker chooses to index fresh water according to the international value (worldwide) of water. Particularly, first the broker establishes (block 217) the main products of water in the world market and resolves (block 219) the weights for each product and ascertains (block 220) the price of each product and computes (box 221) the value of substance according to each product and calculates (box 222) an index value of the substance based on the compound price of the various products each weighted by its weight factor. An example of establishing (box 217) products resolving weights (box 219), ascertaining prices (box 220) computing a values (box 221) and calculating an index value (box 222) is illustrated hereinbelow in FIG. 3 and the accompanying description.

[0049] The broker then divides (box 223) the collateral into portions (for example a share which may be 1000 m3 of water, the collateral may be marketed using a share or another financial instrument as known in the art) and determines (box 225) a market value of each share according to the index value and the condition of the collateral (for example the price of the share may take into consideration the quality of the water in the lake or the location and accessibility of the water). For example if the index value is 1.07 usd/m3 and a share of the lake contains 1000 m3 then the market value of share may be 1070 usd. The broker then acquires (box 227) rights to market the collateral. For example the broker acquires (box 227) rights to the collateral by setting up a futures contract or supply contract with the municipality that owns a lake. Then the broker sells (box 229) shares to the collateral to an investor at the market value plus a commission.

[0050] The index value is sometimes updated. Particularly, periodically the algorithm checks (box 235) if it is time to update the state of the collateral (for example this may be done yearly or monthly or whenever there is a need to expand or adjust the index) if yes then a professional appraiser appraises (box 236) the collateral for the quantity, quality and availability of the water and the value of the collateral is adjusted (box 237) and then any new collateral necessary is located (box 213) the share certificates are adjusted (box 239) to make sure that each certificate is covered by valid assets and if necessary new collateral is located (box 213). If it is not time to adjust the collateral, (no in box 235) then the algorithm checks (box 233) if the time has comes to update the weights (Wx and Wx.sub.i [e.g. see FIG. 3 lines 362 and 363a-f respectively]) (for example this may be done monthly or even daily). If yes then the weights are resolved (box 219) according to periodic reports of international trade organization of the quantity of trade of various goods in the world. If no then the algorithm checks (box 231) if the time has come to update product prices (e.g. see FIG. 3 lines 364a-f). If yes then the price of a product is ascertained (box 220). The price of a product may be updated, daily, hourly or in real time according to commodity prices available on the Internet or from other source. If no then trading continues (for example selling 229 rights to the collateral).

[0051] FIG. 3 shows the results of example calculations of the weights of products and values of a commodity. In the example of FIG. 3, eight products (water products) are chosen 211. For each water product (A, Q, U, H, I, E, T, and B: Export, Domestic, Desalinate, Bottled, purify, Food Crops and Biofuel) the product weights Wx (line 362) are the portion of the water market represented by that product. Then for each product one or more representative cases are chosen. For each representative case a case weight Wx.sub.i (lines 363a-f) is resolved and a case value x.sub.i (lines 364a-f) is ascertained respectively.

[0052] In the example of FIG. 3, the broker resolves 219 by looking up trade data that in the chosen region 5% of the water trade is for export (Wa=0.05) and 50% goes to domestic consumption (Wq=0.5) and 9.95% comes from desalinization (Wu=0.0995), 0.05% is bottled (Wh=0.0005), 5% is purified (Wi=0.05), 20% is included as virtual water in food crops (Wt=0.2) and 10% is included as virtual water for production of biofuels Wb=0.1. Thus, in the example, the index price of water 369 is partially (W.sub.i+W.sub.b=30%) dependent on a virtual price of water.

[0053] Alternatively, the calculations for the index value could also include virtual water used in manufactured products such as paper (where water is used to suspend the wood colloids and in cleaning and finishing processes).

[0054] Concerning the agricultural portion, water is utilized in production of agricultural commodities such as orange juice corn etc. Nevertheless, it would be difficult to include irrigation water in the index calculations because 1) much irrigation water is taken directly from natural sources (private wells/rivers/rain) and never accounted for 2) irrigation water is highly regulated and subsidized. Virtual water refers to the volume of water utilized for a product but not actually part of the product. Between 700-3500 liters of crop water are utilized to produce one kilo of cereal. Therefore, buying agricultural commodities essentially includes purchasing water. By including the virtual price of water in agricultural commodities the broker determines a price for water that is dependent upon market forces where there is little government involvement influencing the price. This enables the broker to build a stable market based index value 369 for water.

[0055] A global market weight factor W is resolved 219 for each product. More specifically in the example of FIG. 3, the global market weight factors Wa, Wq, Wu, Wh, Wi, Wt, and Wb (line 262) (in the example of FIG. 3 the market weights are the market portion of Export, Domestic, Desalinate, Bottled, purify, Food Crops, and Biofuels Respectively) are computed based on a fixed algorithm using available statistics.

[0056] Note that in the embodiment of FIG. 3 Wt.sub.1, Wt.sub.2, Wt.sub.3, (line 263e) (the case weights of virtual water in each food crop) are based on the quantity of water physically contained (the quantity of water constituent in the product) in the commodity and not on the quantity of water utilized to produce the commodity. Thus for example a certain market includes in trade of food crops containing 1300 m.sup.3 of water. In that trade there are 500,000 Kg wheat (wheat is 60% water and the density of water is 1000 Kg/m.sup.3, thus 500,000 Kg wheat contains 500*0.6=300 m.sup.3 of water). Then Wt.sub.3=(500*0.6)/1300=0.23. Similarly the total water market (the sum of the water traded in all of the chosen water products) is 6500 m3 and the total water contained in traded food crops is 1300 m3. Thus the market weight of virtual water of agriculture in the index value of water is the portion of the total water market contained in food crops Wt=1300/6500=0.2

[0057] In the example of FIG. 3 the virtual value 365a of water in food crops is computed as follows:

[0058] The commodity corn price in N.Y. is 400 usd/ton; corn contains 75% water and utilizes 1500 m3 irrigation water/ton

t.sub.1=400*0.75/1500=0.2 usd/m3 is the virtual value of water in corn.

[0059] The commodity coffee price in N.Y. is 950 usd/ton, and coffee is 55% water and utilizes 3500 m3 irrigation water/ton. Thus

t.sub.2=950*0.55/3500=0.15 usd/m3 is the virtual value of water in coffee.

[0060] the commodity wheat price in N.Y. is 500 usd/ton; wheat contains 60% water and utilizes 1000 m3 irrigation water per ton

t.sub.3=500*0.6/1000=0.3 usd/m3 is the virtual value of water in wheat.

[0061] Taking into consideration each commodity case weights (line 363e) from the total traded agricultural commodities will give us the virtual value for water in food crops, which is the T price T=Wt.sub.1*t.sub.1+Wt.sub.2*t.sub.2+Wt.sub.3*t.sub.3=0.27*$0.2+0.5*$0.15+0.23*$0.3=0.20 usd/m3 365a. Thus the virtual price of water in agricultural food products T is dependent on the market weight of each agricultural food product, the market price of the agricultural food product and on the quantity of water utilized in production.

[0062] By including the virtual value of water in the index formula the broker computes a representative integrated value of water including the unregulated trade of water in other commodities (products).

[0063] Also in the example of FIG. 3, for the product desalinated water U it is found that in the chosen evaluation region (the world water trade) 647 m3 which is 9.95% of the total water trade is desalinated water. 20% of the worlds desalinated water is used by industrial cities Wu.sub.1=0.20 and the chosen representative case is Perth Australia which produces desalinated water at a cost of u.sub.1=0.80 usd/m.sup.2. 50% of desalinated water use in the world is in vacation areas and islands Wu.sub.2=0.50 and the chosen representative case is Bermuda, which produces desalinated water at a price of u.sub.2=1.50 usd/m.sup.3. 30% of desalinated water use in the world is in oil exporting countries Wu.sub.3=0.30 and the chosen representative case is Saudi Arabia, which produces desalinated water at a price of u.sub.3=4.00 usd/m.sup.3. The weights are updated monthly while the representative prices are updated weekly. Thus the value for desalinated water U=Wu.sub.1*u.sub.1+Wu.sub.2*u.sub.2+Wu.sub.3*u.sub.3=0.2*$0.80+0.5*$1.50+0.3*$4.00=2.11 usd/m3 368.

[0064] Virtual water included in bio-fuels is another part of the water trade. In the example of FIG. 3, the combined market weight of three bio-fuels is 10% of the total world trade of water Wb=0.1.

[0065] Many fuels like bio-diesel (produced from waste oils or oily plants and particularly algae), biomethane (produced by anaerobic digestion of organic waste) and ethanol (produced from fermentation of cellulous waste or grain) contain no appreciable water. Therefore the water content of the fuel is not used to compute the weight factor Wb. Two examples of alternative bases of Wb are the total mass/volume of the biofuel or the quantity of water output from combustion of the bio-fuel. For liquid fuels (like bio-diesel and ethanol) the total volume or mass of the bio-fuels can used to compute the weight factor Wb. Alternatively for any bio-fuel and particularly for a gas (for example methane) where the volume and weight are not comparable to the water content or total volume of a liquid fuel, the mass of water output in combustion products may be used to compute Wb (alternatively for biofuel Wb could be based on the energy output by combustion of the fuel or some other combustion product or constituent [e.g. carbon] of the fuel multiplied by a proportionality factor). Thus the total market of bio-fuels includes 650 m3, which is treated as 10% of the total water trade 6500 m3. The volume of ethanol sold is 390 m3 (Wb.sub.1=390/650=0.6) and the volume of bio-diesel sold is 260 m3 (Wb.sub.2=195/650 0.3). In the example of FIG. 3 the quantity of the water market in biomethane (on which is based the weight factor Wb.sub.3) is calculated based on the output of combustion of the methane. Use of combustion outputs to compute Wb can facilitate comparison between various biofuels that may have very different densities (alternatively energy production or carbon constituent other bases of comparison may be used). Particularly, in the example of FIG. 3 the market includes a trade of 38800 m3 of bio-methane. Methane has a density of 0.67 Kg/m3 at room temperature and burning 1 Kg of biomethane produces approximately 2.5 Kg of water. Therefore burning 38800 m3 of methane produces 38800*0.67*2.5/1000=65 m3 water. Thus Wb.sub.3=65/650=0.1.

[0066] The virtual price of water in biofuel is based on the water input to production of the fuel. To produce 1 ton of ethanol from corn utilizes 3600 m3 of water and the price of ethanol is 800$/ton and thus the virtual value of water in ethanol is b.sub.1=$800/3600=0.22 usd/m3. Similar calculations for biodiesel (where water is necessary for upkeep of algal ponds) give a virtual water value of b.sub.2=0.15 usd/m3 water. In the example of FIG. 3 the virtual value of water in biomethane is based on the quantity of water utilized in production. The cost of methane is 3.00 usd/m3 and producing a m3 of biomethane utilizes 7.0 m3 of water (to keep the digester running) thus the virtual value of water in the bio-methane is b.sub.3=3.0/7.0=0.43 usd/m3. Thus the combined virtual value of water in biofuel B is dependent on the market weight of each product (the total mass of the fuel or the water output in combustion of the fuel) and the quantity of water utilized in production of the fuel B=Wb.sub.1*b.sub.1+Wb.sub.2*b.sub.2+Wb.sub.3*b.sub.3=0.6*$0.22+0.3*$0.15+0.1*$0.43=0.22 usd/m3 365b.

[0067] Alternatively the CO.sub.2 output from combusting the biofuel or the quantity of the carbon constituent in the biofuel could be used as a common basis of computing the weight factor of all the biofuels.

[0068] Once each product weight and the value of water in each product and class of products is computed the prices are multiplied by the respective weights giving a combined value. In the example of FIG. 3 the sum of Wa*A+Wq*Q+Wu*U+Wh*H+Wi*I+Wt*T+Wb*B=0.05*0.92+0.5*0.77+0.0995*2.11+0.0005*200+0.05*1.75+0.2*0.198+0.1*0.22=0.89 usd/m3 366. This price is adjusted by adding a transport cost N=0.01 usd/m3 (for example the average cost of shipping water from the water source to the distributor) and an exit fee cost D=0.03 usd/m3 (for example the average exit fee paid by water importers for taking water from other municipalities) and E=0.015 usd/m3 the recycle rate (taking account of the fact that some waste water re-enters the distribution system [by percolating into groundwater/running off into rivers/or via engineered water reuse]) giving an adjusted price of 0.91 usd/m3 367. Finally the final price is found by multiplying the adjusted price by a supply and demand factor Z=1.12 (when there are a lot of sellers of water certificates and few buyers the price is adjusted up and vice versa when the sellers outnumber the buyers) and a waste factor (1.05) which takes into account the increase of price to the consumer due to the loss of water between the source and the consumer. Thus the index value of water in the example of FIG. 3 is 1.07 usd/m3 369.

[0069] Using index value 369 of FIG. 3 (described above) companies get securities or purchase of water contracts for the value of the water at the index value. A company distributes contracts in the form of water basket stocks based on the water index value. A company can enter into agreements with finance institutions or investments housesdistributing water basket stocks for their clients and getting agreeable commissions and securities from the trading.

[0070] Alternatively a virtual value of a substance can also be computed based on a cost of a commodity for which there exists a product of the substance that is a substitute for the commodity. For example, it is possible to compute a virtual price for water from the price of gasoline. Since ethanol is a substitute for gasoline and since a major part of the cost of ethanol production is water, then it is possible to compute a virtual price of water based on the price of gasoline. For example since the price of gasoline is $700/ton and ethanol is a substitute for gasoline and since one can produce 1 ton of ethanol from corn which utilizes 3600 m3 of water to grow, then the virtual value of water based on the price of gasoline is $700/3600=B=0.19 usd/m3.

[0071] FIG. 4 is a flowchart illustrating a method of investing. An investor first chooses (box 470) a commodity (for example fresh water) in which to invest and then finds (box 472) a broker who is selling shares or other financial instrument (for example a bond, a certificate, a futures, a stock, a basket) in the commodity. Then the investor uses an index value to the commodity calculated (box 474) by the broker (for example index value 369 as described in FIG. 3 and the accompanying description). According to the calculated index value, the investor decides (box 476) whether to invest. If yes then the investor buys (box 478) shares from the broker. If no then the investor chooses (box 470) another commodity in which to invest.

[0072] In sum, although various example embodiments have been described in considerable detail, variations and modifications thereof and other embodiments are possible. Therefore, the spirit and scope of the appended claims is not limited to the description of the embodiments contained herein.