In recent conversations with various water wonks at various
conferences, I've thought more about the "proper" way to account
for water flows. (Chapter 10 of this describes the
authoritative, scientific version of proper flows -- according
to its author :) The main problem to worry about is over-
allocations of diversions that can lead to rivers running dry.*
So here's MY summary of how to handle diversions: -
Environmental flows are set aside before economic flows are
allocated. - Economic diversion rights are assumed to be 100
percent consumptive. - The sum of economic rights cannot exceed
economic flows (over time or on the spot). - Owners of
diversions may use 5 percent or 100 percent of those diversions.
Excess or "lost" flows go down the river, to the environment,
but NOT to others, since their diversions are already accounted
for.** - Some people may worry about the "inefficiency" of these
losses, but they are not inefficient if they improve the quality
of the environment, which is a public good. - Diver