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' Our economic assessment focuses specifically on externalities -- costs that are not <br /> P Y <br /> ' directly born by the project or business concerned. There are environmental and <br /> epidemiological costs that private companies do not bear unless they are mitigated, <br /> often as a result of government actions. In fact,the state of Colorado has numerous <br /> standards that newly proposed mining operations are subject to, including noise, <br /> pollution,wildlife conservation,water, and site remediation to protect resident <br /> populations and fragile mountain environments. But not all externalities are <br /> ' necessarily reduced or completely eliminated. <br /> Our economic assessment of the proposed DMRM is posed in terms of risk and <br /> vulnerability.? In terms of risk, we assess what would happen if desired outcomes <br /> are not obtained - in other words, the possibility that Colorado mining standards do <br /> not fully control negative externalities and that unforeseen consequences result. We <br /> ' may even be faced with the now well-know possibility of a Black Swan - an <br /> unpredictable or unforeseen event with extreme consequences.$ In terms of <br /> vulnerability,we are looking at the degree to which a population or environment is <br /> unable to cope with and/or recover from the impact of an unanticipated risk. <br /> In making an economic assessment of the potential societal costs of the proposed <br /> ' DMRM sand and gravel mine under uncertainty (risk), the following areas are <br /> addressed <br /> • The Benefits of Sand and Gravel Mining <br /> • Risks to Vulnerable Wildlife <br /> • Risks to Vulnerable Water Resources <br /> • Health Risks and Vulnerability <br /> • Real Estate Vulnerability <br /> • Additional Costs of Traffic Congestion <br /> • Challenges of Rehabilitation, and <br /> • Lessons Learned about Risk and Vulnerability <br /> The argument made is not a standard cost-benefit analysis due to uncertainty in <br /> each area of concern. Further, indirect costs may not be fully mitigated by <br /> ' regulation even if all government rules are meticulously followed. For example,the <br /> fact that the DMRM is located close to Empire raises an additional issue of risk and <br /> vulnerability, as many Empire property owners will face reduced real estate values <br /> ' upon the sale of their properties. In addition, as Clear Creek County is a gateway to <br /> one of Colorado's most important industries - outdoor recreation, direct mine <br /> ' regulation cannot erase the risk to tourism caused by increased traffic congestion on <br /> ' ?The World Bank uses a similar framework in the consideration of its projects For example <br /> see the current project page on the World Bank's website: <br /> https://openknowledge.worldbank.org/discover?scope=%2F&query=vulnerability&submit <br /> ' 8 Black Swan terminology became popularized with the 2008 Great Recession,as most <br /> economic analysis had not predicted the precipitous stock market crash. <br /> 7 <br /> t <br />