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Climate Change: The Fiscal Risks Facing The Federal Government/Wildfire Suppression

< Climate Change: The Fiscal Risks Facing The Federal Government


Additional Annual Federal Wildland Fire Suppression Expenditures in 2090 Due to Climate Change:
$2.3 billion ($500 million today)

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While many factors will affect wildland fire and Federal suppression expenditures over the course of this century, the risk posed by climate change for suppression budgets at Federal land management agencies is immense. All else equal, climate change could significantly increase area burned each year in the U.S., causing suppression expenditures to double within just a few decades and nearly triple by late-century.

Climate Change and Wildland FireEdit

In 2015, the USDA Forest Service published a report acknowledging the role of climate change in the rising cost of wildfire operations (USDA Forest Service, 2015). Climate change has led to fire seasons that are now on average 78 days longer than they were a half century ago. The six worst fire seasons since 1960 have all occurred since 2000. The number of acres burned each year has doubled in the past few decades due to the combined effects of climatic factors and a legacy of aggressive fire suppression—and may double again in the next few decades. Higher temperatures and variable and unpredictable precipitation are magnifying the risk and driving up the cost of suppressing wildfire, compounding the effects of increasing development in the wildland-urban interface (WUI). The Forest Service noted that, as the impacts of climate change intensify, wildland fire management efforts will be further complicated by limited water availability for suppression, more fire-prone vegetative composition, and further lengthening of the fire season—reaching up to 300 days in many areas of the country (USDA Forest Service, 2015). While Federal fire suppression expenditures represent a small portion of the total Federal Budget, they comprise a large and growing portion of the budgets of Federal land management agencies.

Risk AssessmentEdit

Modeling by the USDA Forest Service for this assessment indicates that the impact of climate change alone on fire suppression expenditures[2] in the contiguous United States could be in the billions each year within just a few decades. Median estimates are $1.3 billion by mid-century and $2.3 billion by late-century, with ranges of $800 million to $2.0 billion per year and $1.2-$3.5 billion per year, respectively. In comparison, historical average total expenditures (1995-2013) were just over $1.3 billion. The estimated cost increases are the equivalent in today’s economy of approximately $600 million per year ($400-$900 million) in mid-century and $500 million per year ($200 million - $1 billion) in late-century.

Climate change is one of several factors that will affect the pattern, extent, and cost of wildland fire in the United States over the course of this century, and results suggest that, all else equal, the impact of climate change could double Federal fire suppression expenditures by mid-century and triple them by late-century, relative to historical average expenditures. These additional costs could put considerable pressure on the Federal land management agencies responsible for fire suppression, as well as allocations across the Federal Budget.

In addition, these costs could be compounded by continued growth in the WUI. Gebert et al. (2007) found that suppression expenditures are 0.11 percent higher per 1 per cent increase in housing value in proximity to an ignition. Holding that relationship constant and assuming that WUI property value increases commensurately with real GDP,[3] total Federal fire suppression costs could be 13 percent higher in mid-century and 44 percent higher in late-century. This would bring the combined effect of climate change and WUI development on Federal fire suppression expenditures in late-century to $3.6 billion with a range of $1.7-$5.0 billion.

The first step of this assessment analyzed historical relationships between maximum daily temperature and other variables, and the total area burned by fire on USFS- and DOI-managed lands using multiple regression. Since temperature has been shown to influence fuel moistures, fire season length, extreme fire weather, and lightning and storm tracks, it serves as a rough proxy for many ways that climate can influence wildfire.

The second step estimated the relationship between area burned and suppression expenditures, also using regression. The third step used projected increases in temperature from climate models in an unmitigated climate change scenario to project changes in area burned. Finally, the fourth step used projected climate-related changes in area burned, together with the results of the second step, to project mid- and late-century changes in suppression expenditures. Uncertainty in the temperature change projections from climate models as well as uncertainty related to regression model estimates of area burned and suppression expenditures were quantified using Monte Carlo simulation, producing the ranges presented above.

Key Limitations and UncertaintiesEdit

While there is little doubt that both a changing climate and a long-term growth trend for residential and commercial development in the WUI are already impacting—and will continue to impact—wildland fire management, substantial uncertainty remains regarding the extent of those impacts over the coming decades. The size of the range of suppression estimates reflects only a portion of this uncertainty; climate change could cause actual suppression expenditures to increase by less than the lower bound or more than the upper bound. In addition, the model used in this assessment does not incorporate several key factors—including four in particular that could have substantial bearing on the pattern and implications of fire over the course of the 21st century.

First, while average maximum temperature is a reasonable proxy for many of the effects of climate change on fire, it may not capture the full impact of climate change. In particular, it may represent increased incidence of temperature extremes fairly well, but may only partly capture increases in prolonged high-temperature periods and drought expected to occur with climate change. For example, fire season length, while related to temperature, may also increase due to other climate change phenomena, and this could affect expenditures in ways not captured by this analysis. Increased variability in precipitation and changes in fuel moisture and water availability for suppression are also not represented.

Second, both fire and climate are expected to substantially change vegetation composition over the coming 85 years, including the prevalence of vegetative fuels that enable and sustain fires. Detailed vegetation modeling would be required to determine the extent to which these changes would occur, and the extent to which they would alter area burned or suppression expenditures.

Third, growth in the WUI could influence wildfire ignitions and area burned and hence heighten efforts and suppression expenditures to protect life and property. Population and income variables were not used in the model as they were generally found either not to be significant or not to appreciably increase the predictive power of the area-burned model—perhaps due to relatively small sample size given a limited historical data set. The estimates provided above for the compounding effect of WUI development, based on Gebert et al. (2007), are intended to illustrate the potential sensitivity of fire suppression expenditures to WUI development.

Finally, the model holds constant the general approach to wildland fire management. Changes in wildfire suppression strategies and technologies, wildland fuels management practices, and other risk management strategies could affect the area expected to burn or the expenditures incurred per unit area. Some of these changes may occur as an adaptive response to growing wildland fire risks and/or as part of efforts to enhance carbon storage in the land sector. Previous shifts in management regime can be detected in historical data. For example, an upward shift in expenditure pattern occurred in FY 2000, corresponding to changes associated with the National Fire Plan. A second structural shift is detectable in FY 2011. However, any future shifts would be policy-dependent and uncertain in their timing and magnitude, so they are not projected.

The USDA Forest Service white paper detailing the modeling conducted for this assessment provides additional discussion of major uncertainties and limitations.

  1. Acres burned on Federal land in the continental United States (excluding Alaska).
  2. Estimates include wildland fire suppression expenditures only and do not include other wildland fire management expenditures.
  3. This assumption is roughly consistent with both past trends and future projections for the net effect of household formation, housing depreciation and demolition, and home price growth.