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