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Chapter 1 Introduction <br />A. Overview of the Analysis <br />The economic impact analysis reported here supplements an earlier study (see Brookshire et <br />al., 1993 and Brookshire et al., 1994) by extending the analysis to a detailed regional focus in <br />order to capture some of the specific effects of critical habitat flow requirements on <br />development projects on the Jicarilla Apache, Navajo, Southern Ute and Ute Mountain Ute <br />reservation economies and the surrounding 10-county area. The method of analysis follows <br />the earlier study by constructing scenarios that project economic activity into the future under <br />two conditions. The first is a baseline scenario under which water supplies are fully developed <br />without any consideration for the listed fishes: the "without fish baseline" (WOFBA) scenario. <br />The second considers actions necessary for the protection and recovery of listed fishes, and <br />necessarily involves some restriction of water development: the "with fish" (WF) scenario. <br />The comparison of the two scenarios is intended to yield an upper-bound projection of <br />regional economic activity. In all likelihood, impacts will be less severe than the upper-bound <br />projection as economic agents and institutions effect adjustments to the reallocation of the <br />region's resources throughout the study period. <br />Sectoral output and employment are projected over the study period for the WOFBA and WF <br />scenarios using an Input -Output (I-O) method of economic modeling. The actions in the <br />WF scenario to protect the listed fishes include flow maintenance and habitat protection. The <br />impacts result directly from restricted availability of water, including agricultural use, <br />construction (canceled water projects), electric power production, and recreation (reduced <br />recreational activity), as well as from the indirect effects of the reallocation of resources due <br />to the direct effects. These impacts occur at various points in time throughout the study <br />period. <br />1 <br />