Summary: Wildfire Costs, New Development, and Rising Temperatures
April 18, 2016
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 White Paper with nine solutions for controlling the pace, scale, and pattern of future development in the Wildland-Urban Interface (WUI).
Using land use planning to reduce risk as wildfires increasingly threaten urban area.
Two sets of interactive maps that show which communities have been threatened by wildfire and 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.
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:
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.
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 full 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
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.
A similar journal article, describes the trends in wildfires, the challenge of defending private property, the solutions tried so far, and outlines new ideas that could significantly reduce costs and risks by altering the pattern of future home building on fire-prone lands. It was published in the March-April 2015 edition of The Solutions Journal.
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.
Using Land Use Planning to Reduce Risk as Wildfires Become an Urban Issue
As more development occurs near wildfire-prone lands, there is a growing need to reduce risk through improved land use policies and tools.
We also developed a similar report in cooperation with Summit County, CO that provides recommendations for how that community can improve and strengthen its approach to addressing wildfire risks.
The lessons from these reports can help other local governments and federal policy makers develop best practices, lessons, and tools to reduce future wildfire risk.
Since 2000, more than 15,000 wildfires burned in the continental United States, and 127 urban areas (cities with more than 75,000 residents) were threatened by major wildfires (fires greater than 5 square miles in area) that burned within 10 miles of the city.
Communities can apply now for a CPAW assistance grant to help reduce wildfire risk within the wildland-urban interface through improved land use planning.
Do Insurance Policies and Rates Influence Home Development on Wildfire-Prone Lands?
Those interested in reducing wildfire risk have asked whether insurance can play a role in making new and existing homes safer.
This briefing paper explores two questions: a) whether insurance rates and policies steer new development away from fire-prone lands; and, b) whether insurance rates and policies reduce the risk from wildfires to existing development.
Insurance rates and policies currently do not appear to consistently drive decisions about whether or not to build homes in wildfire-prone areas.
Insurance rates and policies, as well as education, are having a positive influence on the application of fire-safe building and landscaping practices. And increasingly, communities are using land use regulations to protect existing homes and to require fire-safe practices of new developments.
The cost of defending homes from wildfires is often a state and federal burden; therefore, there is little incentive to local governments and homeowners to build on safer lands. No clear policy alternatives have been developed that would lead to financial penalties for private land management decisions that increase risk or financial rewards for decisions that reduce risk.
To create a strong incentive for improved land use planning and to direct future development away from fire-prone lands, local governments must bear a higher proportion of the firefighting costs.
Communities Threatened by Wildfire, 2000-2014
The interactive map identifies frequently threatened towns and cities, including the different sizes and distances of wildfires from nearby communities
Potential for WUI Development
These 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 Forestrymanuscript.
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.
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.
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.
Wildfire Experts’ Paper
The ten wildfire experts authored this paper in an effort to share important policy insights from fire science with decision makers. Congress, for example, is considering a number of policy and fiscal changes concerning federal wildfire programs.
Journal Articles on Wildfire Costs
Headwaters Economics has published three journal articles related to our wildfire costs research.
The most recent manuscript describes the trends in wildfires, the challenge of defending private property, the solutions tried so far, and outlines new ideas that could significantly reduce costs and risks by altering the pattern of future home building on fire-prone lands. The article was published in the March-April 2015 edition of The Solutions Journal.
Another manuscript uses wildfires in the Sierra Nevada area of California as a case study to estimate the relationship between housing and fire suppression costs. The full manuscript, “Evidence for the effect of homes on wildfire suppression costs” (1.7M PDF), is published in the International Journal of Wildland Fire.
The second manuscript, “Potential for future development on fire-prone lands” (1.5M PDF), analyzes the potential for wildland-urban interface development for the 11 continental western states and is published in the Journal of Forestry.
