Fire & Economics
Wildfire is a natural phenomenon with substantial economic consequences, and its management is complex, dynamic, and rife with incentive problems. This article reviews the contribution of economics to our understanding of wildfire and highlights remaining knowledge gaps. We first summarize economic impacts to illustrate scale and trends. We then focus on wildfire management in three phases: mitigation before fires occur, response during fires, and response after fires. The literature highlights economic interdependencies and spillover effects across fire-prone landscapes as the source of economic inefficiencies and motivation for public institutional response. The literature illustrates the complexity of this problem with its myriad threads, including the trade-offs of living in fire-prone environments, the prospects for using controlled fire and mechanical fuel removal for reducing wildfire severity, the decision-making environment that firefighters face, and the economic consequences of wildfire smoke on health. Economics provides valuable insights, but fundamental questions remain unanswered.
Contrasting the efficiency of landscape versus community protection fuel treatment strategies to reduce wildfire exposure and risk
We examined the financial efficiency and effectiveness of landscape versus community protection fuel treatments to reduce structure exposure and loss to wildfire on a large fire-prone area of central Idaho. The study area contained 63,707 structures distributed in 20 rural communities and resorts, encompassing 13,804 km2. We used simulation modeling to estimate expected structure loss based on burn probability and characteristics of the home ignition zone. We then designed three fuel management strategies that targeted treatments to: 1) the surrounding areas predicted to be the source of exposure to communities from large fires, 2) the home ignition zone, and 3) a combination of the landscape and home ignition zone. We evaluated each treatment scenario in terms of exposure and expected structure loss compared to a no-treatment scenario. The potential revenue from wood products was estimated for each scenario to assess the cost-efficiency. We found that the combined landscape and home ignition zone treatment scenario which treated 5.7% of the study area resulted in the highest overall reduction in predicted exposure (47.5%, 100 structures yr- 1) and predicted loss (69.1%, 57 structures yr- 1). Home ignition zone treatments provided the best predicted economic and per area treated performance where exposure and loss were reduced by one structure by treating 89 and 111 ha per year, respectively, with an annual cost of $33,645 and $73,672. Revenue from thinning was the highest for landscape fuel treatments and covered 16% of the required investment. This work highlighted economic and risk tradeoffs associated with alternative fuel treatment strategies to protect developed areas from large wildland fires.
We systematically selected and reviewed 20 thinning studies to analyze key variables affecting machine productivity and harvesting costs. The average cost of forest thinning was lowest for a mechanized whole-tree thinning operation at $21.34/ton or $2,075/ha. Feller-bunchers and skidders showed the highest productivity in felling and extraction machines, respectively.
This report describes the full range of costs associated with wildland fire in the Western United States (U.S.) to help inform leaders and policymakers working to improve wildfire response and mitigation. Wildfire cost information has, in the past, primarily focused on suppression costs and structure losses; however, as this report shows, there are many other types of costs relating to values such as human health, water supply, transportation, the labor market, and local economics, among others. These less-recognized costs are massive in aggregate.
Most studies find that fuel treatments are not financially viable for land management agencies based on revenue generated from forest products, biomass, or carbon credits at the time of implementation. Fuel treatments also tend to not be financially viable based on future management costs savings (fire suppression and rehabilitation costs) or averted losses in forest products from wildfire over the lifespan of treatment effectiveness. Similarly, most studies that consider benefits beyond those accruing to land management agencies find that the benefits from any single category (e.g., damage to structures and infrastructure, critical watersheds, air quality, or ecosystem values) are not sufficient to offset treatment costs. Overall, the recent literature suggests that fuel treatment projects are more likely to have benefits that exceed costs if they generate benefits in multiple categories simultaneously. The literature also documents tremendous variability in benefits and costs across regions and between projects within regions, which poses a challenge to reaching general conclusions about the benefits and costs of fuel treatments at programmatic scales, and suggests that practitioners should proceed with caution when trying to extrapolate the benefits and costs for a prospective fuel treatment project from estimates reported in the previous literature.
We investigate priorities and effectiveness of wildfire suppression using a novel empirical strategy that compares 1,500 historical fire perimeters with the spatial distribution of assets at risk to identify determinants of wildfire suppression efforts. We find that fires are more likely to stop spreading as they approach homes, particularly when those homes are of higher value. This effect of threatened assets persists after controlling for physical factors (fuels, landscape, and weather) using outputs from a state-of-the-art wildfire simulation tool, and the probability that fire spread will be halted is affected by characteristics of homes 1–2 km from a fire’s edge. Our results provide evidence that wildfire suppression can substantively affect outcomes from wildfires but that some groups may benefit more from wildfire management than others.
Denver water and US Forest Service spent over $60 million to protect Denver’s water supply. Did it work?
This webinar presents research which provides insight on how the economic returns from proactive wildfire mitigation could be improved. The research team produced an economic assessment of Denver’s Forests to Faucets partnership, a collaboration which invested >$60 million in wildfire mitigation projects between 2011 and 2019. The research, combining wildfire modeling, sediment modeling, and primary and secondary data on economic values, quantified the impact of the actual investments on multiple values at risk. Large benefits to source water protection and other values at risk resulted from these proactive investments but the benefits only exceed the costs of funding wildfire mitigation under certain conditions.
The two-day event, hosted by Idaho Governor and WGA Chair Brad Little, featured the Western Governors and their specials guests in public conversations about western drought, cross-boundary land management, cybersecurity, clean energy, broadband deployment and telehealth expansion.
View recorded sessions.
NV Section of the Society for Rangeland Management is hosting an all-day webinar.
Strong associations between both distance to nearest destroyed structure and vegetation within 100 m and home survival in the Camp Fire indicate building and vegetation modifications are possible that would substantially improve outcomes. Among those include improvements to windows and siding in closest proximity to neighboring structures, treatment of wildland fuels, and eliminating near-home combustibles, especially in areas closest to the home (0–1.5 m).