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.
- Diverters CAN sell the diversions that they do not use (i.e., tailwater), but those diversions need to be quantified and certified with the same methods used to certify and monitor the original diversions.
* A river with 100 units of flow and 10 diverters with 50% consumption of their diversions may have the right to divert 20 units of flow (i.e., 20 units diverted of which 10 units are used). If they increase their efficiency to 62.5 percent of their rights, then the river will be dry after 100/12.5 = 8 diverters, leaving the last two high and dry.
** Beware and remember: A city may sell 100 units of water to customers while only consuming 10 units of water (via evaporation, runoff, etc.); the other 90 units may be cleaned and discharged at the wastewater treatment plant.