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1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />i <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />1 <br />i <br />1 <br /> <br />Federal Register / Vol. 59, No. 54 / Monday, March 21, 1994 / Rules and Regulations 13379 <br />comment period, the Service has <br />determined that some areas are not <br />required for the survival and recovery of <br />the fishes because they do not contain <br />the constituent elements, meet the <br />additional selection criteria, or are not <br />in historical habitaL In addition, other <br />areas may contain constituent elements <br />but may contribute little to the prospect <br />of recovery for one or more of the four <br />fishes. Some of these areas are within <br />sections of designated critical habitat <br />and will be evaluated on a case-by-case <br />basis. Five stream sections are separable <br />and have been removed from <br />consideration as part of critical habitat <br />because ofe lack of biological <br />importance. These five areas are: <br />• Davis Dam to the upstream end of <br />Topock Marsh on the mainstem <br />Colorado River (AZ, CA, NV) (bonytail <br />chub) <br />• Bonita and Eagle Creeks, tributaries <br />to the Gila River (AZ) (razorback sucker) <br />• Cherry-and Canyon Creeks, <br />tributases to the Salt River (AZ) <br />(razorback sacker) <br />• Sycamore, Oak, and West Clear <br />Creeks, tributaries to the Verde River <br />(AZ) (razorback sucker) <br />• The Verde River from Sullivan Lake <br />to Peddnsville (AZ) (razorback suck") <br />The Service reiterates that any or all <br />of these sections could contribute to the <br />recovery of one or more of the fishes; <br />however. they do not provide a primary <br />recovery-area and are considered only <br />marginally important. The Service also <br />notes that some of these areas may_not <br />have been historiml habitat for the <br />razorback sucker, a further indication <br />that these areas may have only limited <br />value in the recovery of these fishes. <br />Economic Impacts <br />Introduction <br />Section 4(b)(2) of the Act directs the <br />Secretary of the Interior (Secretary) to <br />consider economic and other relevant <br />impacts in determining whether to <br />exclude proposed areas from the final <br />designation of critical habitaL The <br />Service, as delegated by the Secretary, <br />may"odude areas from critical habitat <br />designation when the benefits of <br />exclusion outweigh the benefits of <br />inclusion; provided that exclusion will <br />not result in extinction of a species. An <br />economic analysis (Brookshire et al. <br />1994) was conducted on the <br />consequences of this action (critical <br />habitat designation). <br />The study region for the economic <br />analysis includes the seven States of the <br />Basin: Arizona, California, Colorado, <br />New Mexico, Nevada, Utah, and <br />Wyoming. The timeframe chosen for the <br />study, 1995 through 2020, encompasses <br />the time period projected for the <br />recovery of the endangered fishes. <br />Linkages between the biological <br />requirements for recovering the <br />endangered fishes and economic <br />activities in the region formed the basis <br />for the economic analysis. As an index <br />of these biological requirements, <br />adjustments made in the operations of <br />Federal reservoirs in the Basin and/or <br />mitigation of nonflow related activities <br />along the river's 100-year flood plain <br />were included. The effects of recovery <br />efforts on future water depletions in the <br />Basin also were taken into <br />consideration. The direct and indirect <br />impacts of these possible changes on <br />current and prospective economic <br />activities were then estimatedfor each <br />State, the region, and the national <br />economy. <br />It is impossible to predict the outcome <br />of future section 7 consultations <br />involving endangered fishes in the <br />Basin. If the Upper Basin and San Juan <br />Recovery Implementation Programs <br />(RIP) do not show sufficient and timely <br />progress in recovering the endangered <br />fishes, some planned water <br />developments may be modified, scaled <br />back, delayed, or foregone. This - <br />assumption provides an upper bound on <br />the potential magnitude of economic <br />impacts associated with the critical <br />habitat designation. If the R111's are <br />successful in achieving their objectivm <br />many of the negative economic impacts <br />can be avoided. <br />Economic Modeling <br />Two types of economic effects are of <br />interest when considering the economic <br />impacts of critical habitat designations: <br />regional economic impacts andnational <br />economic efficiency impacts. Regional <br />economic impacts refer to the direct and <br />indirect impacts of the critical habitat <br />designations on specific geographic <br />regions, such as States or other <br />subregions of the country. <br />Regional economic impacts were <br />analyzed using input-output (1-0) <br />models that organize the basic <br />accounting relationships that describe <br />the production sector of the economy <br />(Brookshire et aL 1993). The 1-0 <br />method is based on the assumption that <br />all sectors of the economy are related, <br />and the production of a good or service <br />can be described by a recipe whose <br />ingredients are the outputs from other <br />sectors of the economy. The primary <br />inputs are labor, capital, and other raw <br />resources. Through its multiplier <br />analysis, the 1-0 model is capable of <br />generating estimates of the changes in <br />output for economic sectors, changes in <br />employment and changes in income <br />due to the critical habitat designation. <br />The models report total impacts <br />resulting from interactions among the <br />sectors of the economv. <br />National economic efficiency impacts <br />refer to the overall net impacts on the <br />national economy after the effects of <br />interregional transfers have been <br />accounted for. The goal of a national <br />efficiency analysis is to determine <br />whether an action would have an <br />overall positive or negative impact on <br />the national economy. <br />National economic efficiency impacts <br />were analyzed In this study using a <br />Computable General Equilibrium (CGE) <br />model. The CGE model captures the <br />economic interactions of consumers, the <br />production sectors, and the government <br />sectors. The CGE model also analyzes <br />resource reallocations (e.g.. changes in <br />river flows as represented by-increased <br />or decreased hydroelectric generation) <br />in a manner such that the net effects, <br />not just the total effects. are calculated. <br />Given this capability, the CGE model is <br />able to estimate net-national efficiency <br />impacts. <br />Modeling Approach <br />A separate 1-0 model was-developed <br />for each State, and focused on the direct <br />and indirect impacts generated by the <br />critical habitat designation (Brookshire <br />et at. 1993). In most cases, impacts in a <br />given State generated impacts in <br />neighboring States. Thus, it-was <br />necessary to investigate potential <br />offsetting impacts. As a result, an 1-0 <br />model -was constructed that investigated <br />the impacts of the entire region (all <br />seven States). In addition to the State <br />and regional 1-0 models, a CGE model <br />was developed for the economies of the <br />seven-State area and the rest of the <br />United States. This model provided a <br />comprehensive aggregate assessment of <br />the national economic efficiency <br />impacts. <br />Economic activity for the models was <br />estimated using Impact Analysis for <br />Planning W,(Pl AN)1982 data sets that <br />were updated and projected through the <br />year 2020, using data from the Bureau <br />of Economic Analysis of the U.S. <br />Department of Commerce. The IMPLAN <br />data set contains 528 economic sectors <br />that were aggregated to 20 sectors <br />(Brookshire et al. 1994). <br />Without Fish and With Fish Scenarios <br />Two scenarios were used to evaluate <br />economic activities associated with the <br />critical habitat designation (Brookshire <br />et aL 1994). The -without fish" <br />economic scenario consisted of . <br />projections of the level of economic <br />activities that would be observed over <br />the study period if no action was taken <br />to recover the endangered fishes. The