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<br />Historically, California has been the beneficiary of such releases because Arizona and Nevada <br />(the other lower basin states) have not been able to fully utilize the additional water. Although <br />that situation may change in the future, for this study it was assumed that California would <br />continue to benefit from foregone upstream developments. The study originally assumed that <br />all water consumption foregone in upper basin states would benefit California's economy. <br />That assumption was later relaxed to alIow some additional consumption by Nevada to serve <br />the burgeoning need for municipal and industrial water in the Las Vegas area. <br /> <br />The benefit to California will be the inverse of the impact to Colorado's economy. Instead of <br />increasing the rate of irrigation water rights transfers to municipal and industrial uses, critical <br />habitat designations will allow California to experience a decrease in the rate of such transfers <br />relative to baseline conditions. As a result, California will experience relatively higher output <br />in its agricultural sectors compared with pre-critical habitat conditions. The amount of this <br />increase was estimated using a similar approach and data sources were used to estimate the <br />magnitude of agricultural output declines in Colorado and Wyoming. In addition, it was <br />necessary to estimate river transit and reservoir evaporation losses in moving water from the <br />upper to the lower basin. This information was provided by the Bureau of Reclamation. <br /> <br />The other direct economic impact that was quantified for the lower basin was a decrease in <br />sport fishing activity at Lake Mead and Lake Mohave relative to pre-critical habitat conditions. <br />This decrease would come about because state plans to enhance warm-water recreational <br />fisheries in the two reservoirs may be restricted or prohibited because of potential negative <br />impacts on endangered fishes. The magnitude of this effect was estimated using data on <br />fishing activity and fishing expenditures supplied by state officials. Although there may be <br />other direct impacts to the lower basin involving development restrictions in riparian areas, <br />they were not quantified during this study. <br /> <br />For the Virgin River study, the direct physical impacts consisted primarily of flow changes <br />(levels and timing) with some consideration given to water quality issues stemming largely <br /> <br />12 <br />