Clearing the Economic Smoke from Wildfire Policy: An Economic Perspective

In recent years there has been increasing concern about wildfire in the United States, particularly regarding the perceived increases in numbers, sizes, damages, and management costs. In the United States, annual federal wildfire suppression spending has averaged more than $1 billion per year over the last decade, and federal wildfire management expenditures have averaged more than $3 billion.

Wildfires are different from most disasters in that both the cause and the outcome depend in large part on human action, which means that policy is more complicated than simply an emergency response. Wildfire occurrence, as well as the resulting damage, will depend on human behavior, which means the issue is inherently a land management question and one that implicates land-owning agencies as well as private landowners. This human influence continues once wildfires have already started.

There is some potential to improve the incentives for wildfire risk management and firefighting priorities, but doing so will be difficult—and it will require political resolve.

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