Day-Lighting the True Costs of Fire

This week the Western Forestry Leadership Coalition [here] issued a new report: The True Cost of Wildfire in the Western U.S. [available here] (2.79 MB)

Their report “Explores beyond the costs of suppression to help describe the true costs to communities and the environment from large wildland fires.” From the Introduction:

The True Cost of Wildfire in the Western U.S.


The millions of dollars spent to extinguish large wildfires are widely reported and used to underscore the severity of these events. Extinguishing a large wildfire, however, accounts for only a fraction of the total costs associated with a wildfire event. Residents in the wildland-urban interface (WUI) are generally seen as the most vulnerable to fire, but a fuller accounting of the costs of fire also reveals impacts to all Americans and gives a better picture of the losses incurred when our forests burn.

A full accounting considers long-term and complex costs, including impacts to watersheds, ecosystems, infrastructure, businesses, individuals, and the local and national economy. Specifically, these costs include property losses (insured and uninsured), post-fire impacts (such as flooding, erosion, and water quality), air quality damages, healthcare costs, injuries and fatalities, lost revenues (to residents evacuated by the fire, and to local businesses), infrastructure shutdowns (such as highways, airports, railroads), and a host of ecosystem service costs that may extend into the distant future.

Day-lighting the true costs of fire highlights opportunities to use active management to curb escalating costs. Unhealthy forests can increase the risk of fire. Investing in active forest management is therefore valuable in the same way as investing in one’s own preventative health care. Upfront costs can be imposing, and while the benefits may seem uncertain, good health results in cost savings that benefit the individual, family, and society. This analogy helps to highlight the importance of fostering resilient ecosystems before fires occur, as a tool for reducing the costs associated with suppression and recovery as well as extending benefits to a far wider circle of individuals than might be initially expected.

The lead author is Dr. Lisa Dale at the University of Denver. The Western Forestry Leadership Coalition is a State and Federal government partnership. The members of the coalition include: the 23 State and Pacific Island Foresters of the West and the 7 western Regional Foresters, 3 western Research Station Directors, and Forest Products Lab Director of the USDA Forest Service.

Two years ago I wrote an open letter the the U.S. Senate [here] regarding the appropriate way to account for the economic impacts of wildfires. The damages that fires inflict and the cost of fire suppression must both be considered. I wrote:

Cost-plus-loss – Almost since the founding of the US Forest Service in 1905, analysts have evaluated fire costs as suppression expenses plus the capital value of the resources destroyed. The cost of firefighting plus the lost value of whatever burned down is known as cost-plus-loss and is the standard parameter of forest fire cost accounting. …

Federal fire suppression expenses were nearly $2 billion in 2006, but I estimate losses at 48 billion board feet of merchantable timber with an economic value of $24 billion. Therefore total federal forest fire cost-plus-loss was approximately $26 billion in 2006 alone.

That valuation does not account for the loss of habitat, wildlife, watershed, and esthetic values. In many locations the US Congress has deemed that those non-commodity values exceed the timber values. Therefore the 2006 losses in non-commodities exceeded $24 billion, because those forests that were catastrophically incinerated also suffered huge degradation of habitat, wildlife populations, water quality and quantity, and attractiveness for recreation.

Nor does that valuation include the losses incurred on private property in the form of tree farms, ranches, rural homes, and other rural private property destroyed by federal fires emanating from federal lands.

Nor does that valuation include the lives of 20 forest firefighters lost in the line of duty last year.

Thus the $26 billion cost-plus-loss figure underestimates the true losses, which were priceless and irreplaceable.

In The True Cost of Wildfire in the Western U.S. the authors divide the costs-plus-losses from wildfires into direct and rehabilitation costs and indirect and additional costs, roughly immediate vs. long term costs:

Detailing the costs of wildfire is best done in a tiered format; first by describing the costs that tend to fit into specific analytical categories (direct and rehabilitation costs), and then by exploring longer-term costs that evade quantification (indirect and additional costs). In all cases, the terms “losses” and “costs” are used synonymously when referring to infrastructure, ecosystem services, or property; losses may be whole or partial, and we do not distinguish between these layers here.

The authors applied their econometric method to six past fires. They estimated cost-plus loss to be 2 to 30 times the suppression expenses from those fires.

All of these case studies are located in the western U.S., and all illustrate the degree to which total costs exceed suppression costs (Table 1).4 The true costs of wildfire are shown to be far greater than the costs usually reported to the public; total expenses range from 2 to 30 times reported suppression costs. Such a wide range hints at the complexity of accurately tallying wildfire impacts. Estimates of total costs appear to be determined by a host of factors including fire severity, nearby population density, terrain, and the boundaries of the analysis itself.

A group of W.I.S.E. associates has put together a fire cost-plus-loss ledger to aid in total cost estimation. We will be publishing that shortly.

The True Cost of Wildfire concludes with some concerns and recommendations. In rather strong language (for this multi-agency outfit) the authors call lawmakers and resource managers to task:

Suppression cost data are carefully tracked, broken down, and debated in Congress, but as this study and others indicate, suppression costs represent only a portion of the total costs associated with wildfire. As noted by researchers at Yale University, “current data collection policies capture only a snapshot-in-time of wildfire impacts.” In particular, long-term socio-economic impacts are rarely calculated; even the most thorough analyses profiled here offered insights only into costs during and immediately following the fire. The upshot: lawmakers and resource managers are working with an incomplete picture when they engage in wildfire budgeting and planning efforts.

They also decry “insufficient emphasis on active management”:

Although the need to suppress fires will never vanish, “it is becoming clear, in the arid West, that long-term damage to forest watershed resources may be the most serious and perhaps ultimately the largest costs we face through time.” As the extended costs associated with fire become more widely recognized, investments in various treatments to the forest, including thinning and “pre-suppression” activities, are nearly unanimously favored over the current reactive system that gives funding priority to suppression.

They repeat my admonitions of 2007 that decision-makers are not using the right econometric analytical tools:

Improved awareness of the complete costs associated with wildfire will enrich the search for sustainable solutions. Congress is currently looking at a variety of possible reforms. The Council of Western State Foresters (CWSF) and the National Association of State Foresters (NASF), along with key partner organizations, are committed to working with Congress and the Administration as the Partner Caucus on Fire Suppression Funding Solutions to craft a comprehensive and cost-effective solution.

They repeat the common sense advice that fuels management is cheaper than wildfire, especially when all the real costs are accounted for.

Invest in management activities that improve forest health. Investment in existing federal line items such as hazardous fuels reduction, State Fire Assistance, the Cooperative Forest Health Program, and the Forest Stewardship Program to name a few, will substantially improve outcomes.

The next step for the Western Forestry Leadership Coalition, IMHO, is to consider restoration forestry as the preferred method of active management to achieve ecological, heritage, and habitat goals as well as providing the fire resiliency, public health and safety, and economic goals they espouse.

They might also consider funding W.I.S.E.’s practical efforts to create a fire cost-plus-loss accounting system.

They might also take note that we have been blogging about cost-plus-loss for two years now [here].

But all that aside, we salute the Western Forestry Leadership Coalition for their perspicacity and strongly encourage you to download and study their important new report, The True Cost of Wildfire.



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