THE TOTAL COST OF WILDFIRES: IMPLICATIONS FOR TAXPAYERS AND POLICYMAKERS

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1 THE TOTAL COST OF WILDFIRES: IMPLICATIONS FOR TAXPAYERS AND POLICYMAKERS NFPA Wildland Fire Conference: Backyards and Beyond Salt Lake City, Utah November 14-16, 2013 Molly Mowery Wildfire Planning International Robert W. Gray Fire Ecologist, R.W. Gray Consulting, Ltd.

2 Wildfire Trends Going Forward Recent snowpack decline in the Rocky Mountains of up to 28% partly explain earlier and reduced streamflow and longer and more active fire seasons (Pederson et al. 2013). Fire season in the northern Rocky Mountains (US) has increased by 75 days Mega-drought in the southwest - resulting in millions of dead trees, leading to mega-fires and complete type conversion from forest to grass/shrubland (Westerling et al. 2006)

3 Wildfire Burned Area and Federal Suppression Cost Trends $2,000,000,000 $1,800,000,000 $1,600,000,000 Suppression Cost Acres Burned 12,000,000 10,000,000 Suppression Cost) $1,400,000,000 $1,200,000,000 $1,000,000,000 $800,000,000 $600,000,000 8,000,000 6,000,000 4,000,000 Acres Burned $400,000,000 $200,000,000 2,000,000 $

4 Costs are averaging over $4.7 billion/year for all levels of government. This is still just suppression cost indirect and additional costs are not included

5 While we often have a full or basically good accounting of suppression costs we rarely have a good accounting of total costs

6 Example: 2001 Chisholm Fire in Alberta sometimes we have a good partial picture 116,000 ha Health effects estimated at between $9 and $12 million (95% of impacts related to increased mortality risk, restricted activity days, lost wages, acute respiratory symptoms), $2 million in bridge infrastructure, 75 buildings, including 21 homes lost, however their value was not assessed, $1 million lost electrical power, $20 million in lost timber value, Suppression cost was $10 million while extra costs exceeded $33.5 million

7 What does a fuller accounting need to include? Consider long-term and complex costs, including: Impacts to watersheds, ecosystems, infrastructure, businesses, individuals, and the local, state, and national economy, 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 revenue (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. Can be broken down into two analytic categories: Direct and rehabilitation costs (fairly immediate), Indirect and additional costs (longer-term costs that evade quantification). Source: The true cost of wildfire in the western U.S. Western Forestry Leadership Coalition, 2009.

8 Direct Costs

9 Rehabilitation Costs

10 Indirect and Additional Costs Long-term human health Emotional problems Firefighter fatalities Ecosystem services Property values

11 Case Studies

12 2000 Cerro Grande Fire in New Mexico Escaped prescribed fire that eventually burned over 42,500 acres and significantly impacted the town of Los Alamos and the Los Alamos National Laboratory Estimates of all direct, rehabilitation, indirect, and additional costs exceeded $907 million Suppression cost accounted for 3% of the total

13 2002 Rodeo-Chediski Fire in Arizona Wildfire burned over 425,000 acres; the majority on the Fort Apache Indian Reservation Suppression cost estimated at between $43 and $50 million Other direct costs plus rehabilitation costs estimated at $261.5 million Indirect costs estimated at $8.1 million but likely underestimated. Job losses due to the loss of timber for 2 Tribal mills will extend over several generations

14 2002 Hayman Fire in Colorado Wildfire burned over 137,500 acres in the Colorado Front Range south of Denver Total direct costs, including suppression costs, property losses, and USFS facility and resource losses were $139.5 million Rehabilitation, impact, and special costs exceeded $75 million at the end of 2003 Denver Water Board has continued to fund erosion control and water quality treatment at a cost of >$20 million since 2003

15 2003 Old, Grand Prix, and Padua Complex Fires in California Complex of wildfires burned over 125,000 acres and forced the evacuation of over 100,000 residents Property owners filed claims for 787 total losses and 3,860 partial losses Suppression cost estimated at $50 million Estimated true cost of the fire complex is over $1.2 billion; much of this is attributed to post-fire recovery and water mitigation expenditures

16 Q. Why is it important to have a better accounting of total fire cost? A. If elected officials at all government levels knew the total cost or true cost of wildfires they might be more willing to invest in preventative measures

17 Fire costs impact all departments at the federal/state level Finance Natural Resources Environment Social Development Economic Development Advanced Education Health Highways and Infrastructure

18 ...as well as at the municipal government level Public Works Department Finance Department Fire and Emergency Services Administration Bylaw Department Planning Department Economic Development Recreation Department

19 Robbing Peter to Pay Paul At the federal level the lack of prevention (up front) investment results in suppression and immediate rehabilitation costs, over and above yearly appropriations, being robbed from other USDA/USDI programs first then from other federal agencies and programs second. These expropriations of funds can last for several years as indirect and additional costs become apparent. The same approach is taken at the state level when costs exceed appropriations. Municipal governments often have to live by separate rules that require them to balance their books every fiscal year and not carry a deficit.

20 What can be done to counter this trend?

21 Know Your Role and Take Action at the Appropriate Scale Homeowner Neighborhood Community Landscape Need increased level of proactive hazardous fuels mitigation

22 Responsibilities at Multiple Scales LANDSCAPE RESOURCE MANAGERS Hazard mitigation operations HOME NEIGHBORHOOD COMMUNITY Home design, immediate defensible space Wider defensible space By-laws, building codes, planning, enforcement

23 Homeowner/ Neighborhood Apply Firewise principles Understand your insurance policy Prepare ahead Prepare evacuation routes Correct barriers (HOA guidelines) Resources: Firewise Communities/USA, Ready Set Go! program or other community initiatives IBHS Home Assessment checklist

24 Community Identify Risk Prioritize Mitigation Projects Participate in Community Wildfire Protection Plan Utilize best tools for education, outreach, regulations, codes Resources: Fireadapted.org State and local resources (online risk assessments)

25 Landscape-level Hazardous Fuels Mitigation Treatment costs Which treatments work best Cost-Benefit Analysis

26 Treatment Costs $1,400/ac $2,000/ac $600/ac $1,200/ac

27 Fire and Fire Surrogate Study Burn only Thin only Thin and burn

28 Cost-Benefit Analysis Example 1: Grav Fire $2, $1, $- Wildfire Treated Cost-Benefit ($/acre) -$1, $2, $3, $4, $5, $6,000.00

29 Cost-Benefit Analysis Example 2: Bottom-Up Solution: Community-Led Interface Hazard Management Through Development of a Bioenergy Sector Need to add value to the small-diameter and dead wood that constitutes the majority of the hazard. Emerging bioenergy sector (thermal products) has the highest willingness to pay. Attractive to rural government for a number of reasons: Faster pace of hazard reduction than relying on government subsidies, Employment generation in hazard reduction, silviculture, and bioenergy industries, Cost savings through energy conversions for government buildings, New source of income through municipal taxes and joint business ventures, Diversified industrial base, Reduced human health effects from open-burning of hazardous fuels, Etc.

30 Hazard Mitigation Program Longevity and Consistency Tied to Economics $1, Profit (Loss)/Hectare With and Without a Bioenergy Market to Sell Into $1, $ Profit (loss)/ha $0.00 ($500.00) ($1,000.00) $0/BDT $55/BDT $60/BDT $65/BDT ($1,500.00) ($2,000.00) Biomass Value Source: Fuel management operations for City of Cranbrook; total revenue from sawtimber harvest averaged $3, and total cost for harvest of all material averaged $5,

31 Example community of 20,000 Employment Implications: Combined DES and Bioenergy Product Manufacture 140 Full-Time Equivalent Employment Generated by Activity Over a 5-Year Period Full-Time Equivalent Employment District Energy System Design, Build & Operation Pellet Plant Design, Build & Operation Activity Biomass Harvest Operations Indirect/Induced Source: Fink Equipment and Wood Pellet Association of Canada

32 Municipal Budget Implications DES for an example community of 20,000: Top 10 public energy users (hospital, schools, rec-plex, curling rink, airport terminal) Annual heating cost for all using natural gas: $849,339 Potential annual cost using biomass boilers: $414,638 Potential annual savings using biomass thermal: $434,701 Potential annual Carbon Tax savings: $60,000 Pellet Plant: increased municipal tax base increased local employment increased revenue (if joint venture) decreased Carbon Tax (areas treated converted to carbon credit)

33 Steady Employment Opportunities in Wildfire Hazard Reduction Profit from sale of merchantable and unmerchantable wood goes into silviculture (growing future feedstock) and post-harvest fuels management resulting in a dedicated, consistent, fully-funded program Advantages: reduced contract costs retention of trained, skilled workers direct community involvement in hazard mitigation (as opposed to outside contractors) high number of induced/indirect jobs

34 Ability to Economically Treat Private Land Hazards Currently little federal/state funding for private land treatment (not likely to be any in the future either). By-law infraction and other punitive measures are not successful because cost of penalty is lower than the cost of treatment. With a higher willingness to pay for biomass associated with the bioenergy sector, treatment gets closer to revenue-neutral or even revenue-generating. Develop long-term contracts with private land-owners to grow trembling aspen on year rotation (longterm supply of bioenergy feedstock plus strategic firebreaks).

35 Enables us to Treat the Entire Landscape and Not Simply the High Priority Polygons

36 Prepare Key Messages: Wildfire disasters are far more expensive than we think. Preparing today can avoid huge economic losses tomorrow. Investing in sound hazard mitigation and community planning practices increases our resiliency the next time disaster strikes. Studies prove that planning for hazards ahead of time helps communities recover faster and stronger.

37 Research shows: On average, a dollar spent by FEMA on hazard mitigation (actions to reduce disaster losses) provides the nation about $4 in future benefits. - National Institute of Building Science (2005)

38 Research shows: Statewide net benefits of wildfire prevention education efforts significantly outweigh their costs. For an additional dollar spent on [these] programs, a $35 reduction in wildfire damages is expected. - US Forest Service Southern Research Station (2009) Net Benefits of Wildfire Prevention Education Efforts

39 Example from Colorado Springs, CO Waldo Canyon Fire: Combined cost benefit ratio was 1/517 for the three neighborhoods with the highest impacts. - Insurance Institute for Business and Home Safety (2012) - Lessons Learned from Waldo Canyon

40 Future Needs and Recommendations Better understanding of long term impacts by policy and decision makers Full and consistent accounting system to track all types of wildfire impacts Increased communication of our mitigation success stories

41 Questions/ Discussion Molly Mowery Wildfire Planning International Robert W. Gray Fire Ecologist, R.W. Gray Consulting, Ltd.

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