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<br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br />I <br /> <br />BACKGROUND <br /> <br />La Plata Project". In this paper, Lynch references the report written by Robert H. Haveman <br />and John V. Krutilla titled "Unemployment, Idle Capacity and the Evaluation of Public <br />Expenditures: National and Regional Analyses". Both papers determine that when <br />construction occurs in depressed areas, the nominal benefit-cost ratio tends to understate the <br />true benefit-cost ratio. Lynch pointed out that since much of southwestern Colorado is <br />economically depressed and suffers from chronically high unemployment, construction of <br />ALP would result in a large inflow of money spent in the local economy and would employ <br />a relatively large number of local people. Not recognizing these facts would result in an <br />understatement of both short and long term project benefits. While the entire region is not <br />as economically depressed in 1994 as it was at the time of Lynch's paper, there still remains <br />high unemployment on the reservations. <br /> <br />Peter Carlson and Spencer Wilson, both of the Environmental Policy Institute, reviewed in <br />July 1987 over twenty documents and generated the report titled "An Analysis of the <br />Animas La Plata Project Durango, Colorado" which compares the conclusions of said <br />documents. This review was an attempt to consolidate the material from all of the basic <br />documents and put in one place the issues, problems, and concerns about the project. The <br />report found that the benefit-cost ratio developed by Reclamation in various studies over <br />several years for direct benefits was 1.0:1 (1968), 1.27:1 (1979) and 1.5:1 (1987) and for the <br />total benefits, 1.6:1 (1968), 1.39:1 (1979) and 1.6:1 (1987). <br /> <br />2-13 <br />