My two usual concerns returned in this short section.
The author contrasts two ways of managing third-party impacts. Sortof. I have never thought of beneficial use requirements as protecting third parties. I thought beneficial use requirements simply restricted wasting water, such as using large quantities of water to drown gophers. I suppose a third party who would otherwise use that water might use the beneficial use doctrine to complain to the Water Rights division of the SWRCB. But I have always thought of the beneficial use doctrine as between the rights holder and the State. No matter. The author isn’t in favor of using the beneficial use doctrine, because it potentially limits economically efficient uses of water. He thinks the State should manage third party impacts by issuing individual water use permits.
Again, we see a mechanism that favors the powerful (a single elected or appointed official issuing permits to individuals, or an agency issuing case-by-case permits). At the worst, the elected or appointed official could be bought by election support. At the least, it takes sophisticated users to negotiate permit processes in agencies. The people who get water use permits will be the people who are good at interpreting regulations or can hire lawyers.
My second concern is that this commodifies water yet again, and why do we want water traders in the water system? Reading through the comments of the articles that Steve Bloom linked, I saw the intermediaries called “speculators”. I don’t know what’s happening in Australia, since my interest in the world ends at the 395, but I don’t see why middlemen should have an entryway into distributing water, nor profit from it.
I really do understand that this is a proposal to commodify water. But each time I see a new facet of that, I am repulsed again.