Proportional water sharing vs. seniority-based allocation in the Bow River basin of Southern Alberta

We analyze the implications of switching from existing seniority-based allocations to proportional water sharing policies in times of water shortage in the Bow River Sub-Basin in Southern Alberta. In particular, we simulate three variations of the proportional water sharing concept: (1) irrigation districts’ permissible diversions are reduced in proportion to each district's licenced allocations; (2) the diversions are reduced in proportion with each district's past five-year average diversions; and (3) the diversions are reduced proportionately with each district's diversion in a single prior year. Compared to the seniority-based allocations, all three alternative policies produce unambiguously better results. With trades, the prospect of overall economic gain improves further. However, the distribution of potential monetary gains varies across scenarios.

► Economic impacts of switching from existing seniority-based allocations to proportional water sharing policies in times of water shortage in the Bow River Sub-basin in Southern Alberta are estimated.
► It was found that total irrigated crop area could be expanded by 1–13% with 10–40% less water if proportional reduction allocation policies are used instead of seniority-based re-allocation.
► Ability to trade among irrigation districts during water shortages would result in improved annual economic gains of almost $150,000 over proportional re-allocation schemes.