Financial considerations of policy options to enhance biomass utilization for reducing wildfire hazards

Abstract

The Harvest Cost–Revenue Estimator, a financial model, was used to examine the cost sensitivity of forest biomass harvesting scenarios to targeted policies designed to stimulate wildfire hazardous fuel reduction projects. The policies selected represent actual policies enacted by federal and state governments to provide incentive to biomass utilization and are aimed at addressing particular challenges in the production lifecycle of trees to final product. Policies were modeled to compare financial impacts on a per-acre project basis for three scenarios of harvest intensity in southwestern ponderosa pine stands classified as being at high risk of wildfire. This allowed for identification of key cost nodes and how particular policies might better allocate limited resources. Effects of limiting the size of trees harvested and access to biomass markets were also modeled. This analysis showed that the co-location of processing facilities that results in shorter distances traveled is the single most important strategy for reducing costs for all three scenarios modeled. Per acre subsidies and certified product premiums were the next highest ranked in providing economic incentive, followed by production tax credits and cost-share programs. Fuel surcharge waivers and transport tax credits provided the least gains.