Fostering environmental conflict resolutions in water management involves tradeoffs, conflicts, and compromise among economic and environmental objectives. Pareto optimality is often advocated for water management, but its relationship with the nature and mathematical representation of benefits, and implications of tradeoffs for Pareto optimal decisions are rarely examined. We evaluate the shape of Pareto optimal frontiers, their origins for representing benefits, and their implications for incentives of parties to cooperate or conflict over environmental water allocations. The same physical, ecological, and economic relationships that shape multi-objective performance also shape incentives or disincentives to overcome environmental conflicts. Analysis indicates that compromises among benefits can be easier when tradeoff curves are concave, and more adversarial when tradeoff curves are convex. “Knees”, or areas with maximum curvature, bulges, or breakpoints in concave Pareto frontiers, suggest particularly promising areas for compromise. Tradeoff curve convexity or concavity and interior thresholds in performance make negotiated solutions harder or easier. Managing multiple streams regionally, rather than only individually, can sometimes turn convex local tradeoffs into concave regional tradeoffs, more amenable to compromise. Broader portfolios of environmental management also can improve and shift the location and prominence of knees in Pareto frontiers. Conclusions are drawn for how societies can structure environmental water allocations and habitat restoration to improve performance, encourage cooperation, and contain conflict.