(4) Specific, authoritative projections for small 

 areas. 



Appropriate national and regional projections 

 should be used as an underlying forecasting frame- 

 work, and inconsistencies therewith, while permissi- 

 ble, should be documented and justified. 



(c) National projections used in planning are to 

 be based on a full employment economy. In this 

 context, assumption of a full employment economy 

 establishes a rationale for general use of market 

 prices in estimating economic benefits and costs, 

 but does not preclude consideration of special anal- 

 yses of regions with high rates of unemployment 

 and underemployment in calculating benefits from 

 using unemployed and underemployed labor re- 

 sources. 



(d) National and State environmental and health 

 standards and regulations should be recognized 

 and appropriately considered in scoping the plan- 

 ning effort. Standards and regulations concerning 

 water quality, air quality, public health, wetlands 

 protection, and floodplain management should be 

 given specific consideration in forecasting the with- 

 and without-plan condition. 



(e) Other plans that have been adopted for the 

 planning area and other current planning efforts 

 should be considered. 



(f) Forecasts should be made for selected years 

 over the period of analysis to indicate how changes 

 in economic and other conditions are likely to have 

 an impact on problems and opportunities. 



1.4.10 Prices. 



(a) The prices of goods and services used for 

 evaluation should reflect the real exchange values 

 expected to prevail over the period of analysis. For 

 this purpose, relative price relationships of outputs 

 and inputs prevailing during, or immediately preced- 

 ing, the period of planning generally represent the 

 real price relationships expected over the life of the 

 plan, unless specific considerations indicate real 

 exchange values are expected to change. 



(b) The general level of prices for outputs and 

 inputs prevailing during or immediately preceding 

 the penod of planning is to be used for the entire 

 period of analysis. In the case of agricultural plan- 

 ning, normalized prices prepared by the Depart- 

 ment of Agriculture should be used. 



1.4.11 Discount Rate. 



Discounting is to be used to convert future mone- 

 tary values to present values. Calculate present 

 values using the discount rate established annually 



for the formulation and economic evaluation of 

 plans for water and related land resources plans. 



1.4.12 Period of Analysis. 



(a) The period of analysis is to be the same for 

 each alternative plan. The period of analysis is to 

 be the time required for implementation plus the 

 lesser of — 



(1)The period of time over which any alternative 

 plan would have significant beneficial or adverse ef- 

 fects; or 



(2) A period not to exceed 1 00 years. 



(b) Appropriate consideration should be given to 

 environmental factors that may extend beyond the 

 period of analysis. 



1.4.13 Risk and Uncertainty— Sensitivity 

 Analysis. 



(a) Plans and their effects should be examined to 

 determine the uncertainty inherent in the data or 

 various assumptions of future economic, demo- 

 graphic, social, attitudinal, environmental, and tech- 

 nological trends. A limited number of reasonable al- 

 ternative forecasts that would, if realized, apprecia- 

 bly affect plan design should be considered. 



(b) The planner's primary role in dealing with risk 

 and uncertainty is to identify the areas of sensitivity 

 and describe them clearly so that decisions can be 

 made with knowledge of the degree of reliability of 

 available information. 



(c) Situations of risk are defined as those in 

 which the potential outcomes can be described in 

 reasonably well-known probability distributions such 

 as the probability of particular flood events. Situa- 

 tions of uncertainty are defined as those in which 

 potential outcomes cannot be described in objec- 

 tively known probability distributions. 



(d) Risk and uncertainty arise from measurement 

 errors and from the underlying variability of complex 

 natural, social, and economic situations. Methods 

 of dealing with risk and uncertainty include: 



(1) Collecting more detailed data to reduce mea- 

 surement error. 



(2) Using more refined analytic techniques. 



(3) Increasing safety factors in design. 



(4) Selecting measures with better known per- 

 formance characteristics. 



(5) Reducing the irreversible or irretrievable com- 

 mitments of resources. 



