You Are Here: Wildfire » Summary: Wildfire Costs, New Development, and Rising Temperatures

Summary: Wildfire Costs, New Development, and Rising Temperatures

Costs | Firewise and Case Studies |WUI Growth | State Studies | White Paper | Presentation Lessons from Flood Programs | Journal Articles


This page summarizes research by Headwaters Economics on the rising costs of wildland fires in the West. We have done extensive analysis in several areas:

  • A study on why wildfires are becoming more severe and expensive, and how the protection of homes in the Wildland-Urban Interface has added to these costs.
  • A report on whether Firewise reduces suppression costs, in addition to its safety mission; and eight case studies to better understand whether and how communities are altering the way they confront wildfire risk
  • The potential for new home development in the Wildland-Urban Interface (WUI) at the county and state level.
  • State-specific research on the impact of new homes and temperature change on wildfire suppression costs.
  • Completed a White Paper with nine solutions for controlling the pace, scale, and pattern of future development in the Wildland-Urban Interface (WUI).

Why Wildfires Are Becoming More Expensive

Wildfires are getting larger and causing more damage. Headwaters Economics produced this report as part of our long-term commitment to better understand and address why wildfires are becoming more severe and expensive.

The report also describes how the protection of homes in the Wildland-Urban Interface (WUI) has added to these costs and concludes with a brief discussion of solutions that may help control escalating costs. We worked with Ross Gorte, Ph.D., to produce the report. Gorte, a retired Senior Policy Analyst at the Congressional Research Service, is now an Affiliate Research Professor at the University of New Hampshire.

Wildfire threat and protection costs are likely to rise because of climate change and continued home development. Currently, the majority of private wildlands are undeveloped; only about 16 percent of the WUI in the West is now developed, and the remaining 84 percent is available for development. The potential development of these lands is a state and local responsibility, but their development would significantly increase the federal cost of wildfire protection.

Firewise and Case Studies

The Firewise Communities/USA® Recognition Program Firewise focuses on increasing safety and was not designed to lower suppression costs. Our research finds no evidence of a relationship between wildfire suppression costs and Firewise participation.

This lack of evidence that Firewise reduces wildfire suppression costs suggests that policy makers attempting to address future costs are better served focusing on other solutions such as limiting future development in high risk areas.

This finding is especially important in light of our recent report on eight cities and counties across the West that studied whether and how communities are altering the way they confront wildfire risk.

The case studies highlight that western communities are doing little to respond to dangers from future wildfires—compared to what they would need to do to enhance public safety and reduce future suppression costs.

Potential for WUI Development

A new set of interactive maps and tables show that 84 percent of private lands near fire-prone public forests in the West today remain undeveloped, and new building in these areas will increase future firefighting costs for U.S. taxpayers by billions of dollars.

The report uses 2010 Census data to provide both county-by-county and state-level analysis and rankings for the 11 continental western states.

National wildfire fighting costs have averaged $1.8 billion annually for the past five years, and the 2012 fire season was among the worst on record for many regions and states. If just half of the WUI is developed in the future, annual firefighting costs could explode to between $2.3 and $4.3 billion. By comparison, the Forest Service’s total average annual budget is $5.5 billion.

The study identifies where housing has occurred adjacent to fire-prone wildlands in the West using maps of housing density created at the scale of 2010 Census blocks. Forested areas where residential development (census blocks with mean lot sizes less than 40 acres) occurred within 500 meters of public lands were identified as developed wildland-urban interface. This study replicates, using more recent housing and public lands data, the methods described in a June 2008 Journal of Forestry manuscript.

State Specific Studies on Costs, Housing, and Temperature Change

Headwaters Economics has studied wildfires and costs in greater detail in three states–Montana, the California Sierra Nevada, and Oregon. Details include:

  • A Montana report found that, statewide, protecting homes from wildfires costs an average of $28 million annually. If development near fire-prone forests continues, costs to protect homes likely will rise to $40 million by 2025. A 1º F increase in summer temperatures would at least double home protection costs. Additional development and hotter summers combined could increase the annual cost to exceed $80 million by 2025.
  • Research in California’s Sierra Nevada found that rising average summer temperatures are strongly associated with an increase in acres burned. Within the study area, an annual increase in average summer temperature of 1º F is associated with a 35 percent growth in area burned.
  • An Oregon study found that a rise in average summer temperature of 1º F is associated with an increase of 420 wildfires–a large effect given that, on average, 1,800 wildfires burn in Oregon per year.

Nine Ideas for Reducing Wildfire Risk to Communities

This paper, Reducing Wildfire Risk to Communities, offers nine ideas for how best to alter the pace, scale, and pattern of future home development. Getting the incentives right is essential. There should be negative financial consequences for private land management decisions that increase risk, and positive financial rewards for decisions that reduce risk.

The report offers nine ideas aimed at affecting the pace, scale, and pattern of future home building in the not-yet-developed portion of the WUI. They are divided into three categories based on who has the authority to act.

Average Annual Cost of Protecting Homes from Wildfires in Montana

Chart: Average Annual Cost of Protecting Homes from Wildfires in Montana

Local solutions can be acted on by city and county government. They are: (1) improved integration of wildfire mitigation plans into county comprehensive land use plans and; and (2) mandatory disclosure of fire risk to potential homebuyers.

Administrative solutions, which can be acted on by federal land managers, include: (3) bill state and local governments for their share of firefighting costs to create a powerful incentive for improved local land use planning; (4) shift more fire suppression responsibility to local governments; (5) provide technical and financial assistance for land use planning to local governments, prioritized according to local actions to reduce fire risk; (6) buy land or development rights on the most dangerous areas; (7) improve firefighter safety through improved public education and active participation in county land use planning; (8) map of fire risk using national standards, with incentives for added detail by local governments.

Legislative solutions (9) would require action by Congress. We outline a number of principles that would be essential to incorporate into legislation aimed at reducing the costs and risks associated with home building on fire-prone lands.

The ideas are presented as a starting point for a national dialogue on wildfire and reducing risks and costs to communities through improved land use planning.

These nine proposals build on a 2009 White Paper (580K PDF). Both are designed to begin a public dialogue on the need for policies that will decrease the future cost of protecting homes from wildfires. We welcome comments and additional ideas.

Presentation: Risks, Costs, and Solutions

Headwaters Economics has prepared an extensive slideshow presentation (PDF) that overviews the factors behind the growing costs and risks associated with larger and and more intense wildfires. The presentation then discusses how the protection of homes in the Wildland-Urban Interface (WUI) has added to these costs and risks; concluding with a brief analysis of potential solutions.

Lessons for Wildfire from Federal Flood Programs

This paper reviews the experience, both positive and negative, of national floodplain management programs to draw lessons for new approaches to reduce the costs and risks posed by wildfire to properties in the Wildland-Urban Interface (WUI).

During the past several decades, federal flood efforts switched from emphasizing structure protection to encouraging reduced exposure to flooding and promoting financial protection for victims. To help stem the trend of ever-increasing wildfire losses, federal efforts similarly should place a greater emphasis on mitigating wildfire risk before it occurs–through improved building and land use decisions that alter the pace, scale, and pattern of home development on the as-yet undeveloped portion of the WUI.

To produce the report we worked with Carolyn Kousky, Ph.D., who is with Resources for the Future and a leading expert on federal flood management programs.

Journal Articles on Wildfire Costs

Headwaters Economics has published two journal articles related to our wildfire costs research.

Read a May 27, 2014 Op-Ed carried by the Denver Post on the need to better plan for wildfire costs.

Hear an interview with our Director, Ray Rasker, on public radio’s To the Point (“Wildfires Rage across the West” July 2 2012).|titles=To
For more information, contact:
Ray Rasker, Ph.D. at 406.570.7044 or [email]