The Interaction of Wildfire Risk Mitigation Policies in the Presence of Spatial Externalities and Heterogeneous Landowners

Ibtisam Al Abri,Kelly Grogan

doi:10.3390/f11010015

Abstract

The dramatic increase in the number of uncontrollable wildfires in the United States has become an important policy issue as they threaten valuable forests and human property. The derived stochastic dynamic model of this study is capable of determining optimal fuel treatment timing and level simultaneously and as a function of fire risk and fuel biomass dynamics. This study develops a stochastic dynamic model to evaluate the interaction of fuel treatment decisions for two adjacent landowners under various scenarios of misinformation about fire occurrence and spread. Findings indicate that a landowner tends to free ride on fuel treatment undertaken by his adjacent landowner. However, the study finds that the free riding potential of a landowner could be alleviated to some extent by having a neighboring landowner who is aware of fire spillover effects. In addition, the study reveals that the social cost resultant from free riding behavior is lower that the social cost associated with complete absence of fire externality awareness for both landowners. These findings imply that governments could introduce more effective educational programs to ensure that all landowners are fully aware of cross-parcel benefits of fuel treatment in order to align socially and privately optimal decisions, thus minimizing externality costs.

Highlights

Wildfires are an interesting example of a natural hazard with potentially large negative externalities on regions surrounding the initial start of the fire
Fuel reduction practices could significantly reduce fire-related losses incurred by landowners and substitute for fire suppression efforts made by the government
This study explores different sources of misinformation regarding fire spillover effects represented by the fire arrival rate (λ) and fire spread rate (φ) between the two adjacent parcels

Summary

Introduction

Wildfires are an interesting example of a natural hazard with potentially large negative externalities on regions surrounding the initial start of the fire. Government suppression costs have increased from less than $1 billion per year in the 1990s to an average of $3 billion yearly recently [1]. While landowners often cannot control the likelihood of fire (e.g., risk of fire from lightning strikes or human activity), they can affect the severity of the wildfire, and the externality experienced by neighboring landowners, by thinning stands and by using prescribed fires to reduce the amount of fuel present for the wildfire [2]. Fuel reduction practices could significantly reduce fire-related losses incurred by landowners and substitute for fire suppression efforts made by the government. Factors like imperfect information about risk, cross-stand effects, and forest management options, or the cost of preventative practices may discourage landowners from adopting fuel management activities at all or, at a minimum, reduce efforts below the socially optimal amount. Identifying cases with the greatest divergence between individually and socially optimal management and the greatest externality costs would help government agencies develop more effective education programs in order to align socially and privately optimal decisions and minimize externalities

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