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vulnerable to drought's wildfire and tourism impacts, while agriculture may have the <br />greatest loss potential for the eastern plains and San Luis Valley. In this manner we will <br />be able to illustrate why certain areas such as southwest Colorado have high potential <br />for drought losses. <br />3.3.1 (b) Identification of potential economic vulnerability by sector and region, including state <br />facilities and assets. <br />Estimating potential economic losses is an important goal of any hazard risk <br />assessment. People, whether individually or corporately, often better understand the <br />severity of a hazard (not including loss of life) if it is presented as an economic loss <br />rather than a physical measurement of ground shaking or severity of drought. If people <br />can fully appreciate the cost implications of the hazard then they are more likely to <br />adopt and apply principles of hazard mitigation. This is why we have proposed the <br />development of an impact database for use with the proposed drought indicator <br />approach for vulnerability assessment. We will demonstrate in this project that <br />backcasting to correlate drought severity with economic losses by sector and location <br />presents a foundation on which to develop estimates of future drought losses. By <br />assessing the impact to, and vulnerability of various elements at risk (e.g. a state park, <br />a ski resort, or an agricultural region), we set up a framework that facilitates not just <br />predictions of losses in future droughts, but also tools and information with which to <br />select and design appropriate and cost - effective plans for mitigation. Continued <br />collection of data on drought impacts and vulnerabilities using the proposed database <br />will further strengthen the ability to identify potential future economic vulnerability and <br />losses (i.e. risk) over time. <br />In some cases an economic value for a drought vulnerable asset or sector element <br />might not be readily obtainable or obvious. For example, an individual may hold great <br />value in the aesthetic qualities of a landscape or the intrinsic value of various aspects of <br />the environment, but would find it difficult to sensibly quantify that value with a dollar <br />amount (they may hold it to be 'priceless'). However, because of the pragmatic need to <br />place a 'market- value' on features such as habitat or viewsheds for environmental <br />management and other reasons, a broad literature now exists on this topic. AMEC will <br />research this literature with the goal of identifying appropriate guidance for putting <br />economic value on various aspects of Colorado's natural environment. <br />In assessing state assets we will utilize the interviews with agency /division /facility <br />managers to determine if any information exists on economic losses, or can be <br />estimated for use in this study. For example, a state park manager might be able to <br />estimate revenue losses as a result of park closure due to fire hazard or low lake levels <br />in 2002, while a wildlife manager might be able to estimate loss of hunting license <br />revenues or threats to wildlife as a function of drought. <br />For this project we anticipate some sectors will already hold detailed estimates of <br />economic losses for specified drought conditions, or at least for recorded time periods <br />(`impact periods') which we will be able to match to drought conditions. For example, it <br />is likely we will be able to obtain loss records for the agricultural sector from agricultural <br />extension agents, the insurance industry, or industry representatives. We are also likely <br />