Water allocation in the American West has been a mess ever since the beginning, when Prior Appropriation was decided as the way to claim water rights. Essentially, the first person to put a claim of water into "beneficial use" gets those rights.

This is why you see California with such a large share of the Colorado River's water rights, even though it "touches" the river the least: they were the earliest fast-growing state to "use" that water. And that's why you see so many water-hungry crops being grown in the West--the owners have the rights already, and to them, if they don't use it, they'll lose it.

So any agreement here needs to make a compromise between states, the federal government, prior settled law, and owners with effectively "free" water that don't want it taken away from them.

It's a complicated issue, but one step would be to force private owners of water rights to list their rights on an open market (right now some owners of water rights, like the Imperial Irrigation District can choose to never sell them). At least that way you can start the conversation somewhere.

(In fact, John Wesley Powell, namesake of Lake Powell, argued strongly against "prior appropriation" before the area was even settled, and instead argued against a collective approach to the limited and volatile amount of freshwater. He did not succeed.)

https://en.wikipedia.org/wiki/John_Wesley_Powell#Environment...