ABSTRACT
The demand for instream recreational opportunities is growing. The protection of instream flows is regarded as a responsibility of state agencies, which must balance competing uses. Understandably, state agencies hesitate to reserve instream flows when allocations would collide with existing diversion rights in fully appropriated watersheds. One important consideration in the definition of instream flow rights must be their impact on third parties. Particularly important is the effect that instream flow rights could have on off-stream water markets. The problems stemming from the binding flow constraint, however, are not unique to instream flows. Claimants of private instream flows could purchase consumption rights to flows upstream from the minimum flow point and sell them to parties downstream. A way for claimants of instream flows to avoid problems with upstream transfers is to purchase upstream diversions and sell them to users downstream.
