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J' .. ""'~I. , .. ~l!'_{'.' PART II, ASSESSMENT TECHNIQUES Given the previously described study framework, in terms of assumed development alternatives, in- stitutional aspects of water availability, and the technical information needs for decisionmaking. a range of assessment techniques was applied to the Yampa River basIn. The general implication is that the indicated set of studies, the results of which are highlighted in the following chapters. could serve as a general guide for similar assessments in other energy-developing regions of the West. Details of study applications using these techni- ques are given in separate technical reports. In an attempt to demonstrate the interactions of the several study components and the need to consider these interactions, only selected results are highlighted here. REGIONAL ECONOMIC ANALYSIS FOR PREDICTING WATER USE AND WASTE RESIDUALS By JOHN E. SCHEFTER The development and use of coal resources of the Yampa River basin will induce further economic activity within the region. The various sectors or industries of the regional economy do not operate in isolation; they are Interdependent, Growth in one economic sector will result in an increase in its demand for inputs required to produce its product and, thus, will stimulate growth in the sectors providing those inputs. An increase in the produc- tion or output of these indirectly affected sectors will, in turn, stimulate output in other sectors. This increase in the output of the sectors of the regional economy generally will result in an overall increase in employment and population in the region, which will further stimulate growth in the various sectors. Because impacts of the development of coal resources will reverberate throughout the basin, the total (direct and indirect) increase in the output of the regional economy will be larger than just the direct increase in the value of the output of the coal-mining and coal-use sectors. For any given rate of coal mining, the magnitude of the direct and indirect increase in the output of each sector. and the composition of the increase in the overall output of the regional economy, will de- pend upon how and where the coal is used. For ex- ample, the use of any given quantity of coal in a coal-gasification process is likely to have a different effect on the output of the various sectors than would the use of the same amount of coal in thermal-electric-power generation. They are dif- ferent processes and thus require inputs from dif- ferent sectors and different levels of inputs from the same sectors. Similarly. transport of coal out of the basin by coal-slurry pipeline is likely to have a dif- ferent effect on the various sectors of the regional economy than would coal transported by unit train (Palmer and others. 1977). The direct and indirect effects of a given rate of coal mining on the output of the various sectors of the economy, and, thus, on the level and composition of the total output of the regional economy, can be expected to be greater if the coal is used within the basin, rather than tran- sported out of the basin. Each sector of the regional economy uses a dif- ferent amount. of water and generates different amounts and types of residuals per dollar of out- put. Thus, the rate of coal mining, the coal- utilization process, and the method of transporting the coal out of the basin will affect rates of water use and the discharge of waste residuals within the basin. Economic input-output analysis (Miernyk, 1965) provides a means of estimating the total (direct and indirect) changes in the output of each sector of the regional economy, given any specified change in the output of one or more of the energy-related (coal-mining, coal-conversion, or coal-transporta- tion) sectors-or any other sector. Given coef- ficients which specify the amount of water used and residuals discharged per dollar of output for each sector, an input-output model can be used to predict the changes in water use and residuals dis- charged as a result of projected changes in economic activity (Gray and McKean, 1975; Howe and others, 1975). A description of an input-output model of the Colorado part of the Yampa River basin as approximated by Routt and Moffat Coun- ties is given in Udis and Hess (1976), Udis, Adams. Hess, and Orr (1977). and Hirsch James, and Schefter (1978). Input-output analysis provides linear approx- imations to the economic interactions between the sectors of an economy: outputs vary linearly with 14