Graduate Thesis Or Dissertation
 

A Microeconomic Analysis of Wildfire Suppression Programs in the Western United States

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  • This dissertation studies the microeconomics of forest fire suppression programs. It starts with an inquiry into the causes of increasing shares of public land management budgets devoted to wildland fire suppression in lieu of hazardous fuel reduction or other pre-fire risk mitigation programs. The first two chapters consider competing economic theories for why annual appropriations are predominantly devoted to suppression. The first chapter proposes that this unbalanced allocation can arise from a cost externality generated by the availability of reserve or supplemental funds for suppression. The second chapter proposes an alternative explanation: this type of skewed allocation can result from an incident manager’s aversion to risk. Both chapters rely on a subgame perfect Nash equilibrium result to characterize the resulting budget allocation. The third chapter also solves a subgame perfect Nash equilibrium to investigate the properties of the fire budgeting problem at the state government level where fire protection programs are funded in part through forest-based taxation. In this chapter, a state tax planner is restricted to two forms of taxation currently used to raise revenue for public forest fire protection programs: 1) a per-acre fee on forestland, and 2) a tax levied per-unit volume of timber harvested. The model shows that when revenues for carbon storage can be captured by private forestland owners, then per-acre fees are the preferred instrument for raising tax revenues and result in a first-best equilibrium outcome. If instead carbon sequestration revenues are not captured by forestland owners, tax planners are constrained to a second-best equilibrium and the use of harvest taxes instead of the per-acre fee on land. The fourth chapter applies a discrete choice econometric model to administrative data obtained from state and federal fire management agencies overseeing wildfires in the western United States from 2005 to 2014. The model investigates if changes in the availability of reserve funding earmarked for suppression had a significant impact on an incident manager’s likelihood of adopting a full suppression response to unplanned wildfire. This chapter focuses on a change in federal budgeting and policy guidance occurring in fiscal year 2010 to determine if socioeconomic and climatic factors had a different effect on manager choices than they did prior to this policy change. A key factor measured to influence choices via the cost of risk is the distance that a fire burns from residential areas. The model estimates that this factor raised the probability of adopting full suppression following the policy change on fires managed in Washington but lowered the probability on fires managed in Oregon. The model finds evidence that the change in the availability of suppression reserve funds beginning in fiscal year 2010 negatively influenced the probability of adopting full suppression by a small margin, but the effects of this change are indistinguishable from the effects of an update to policy guidance released in 2009.
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  • Pending Publication
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  • 2021-05-18 to 2022-06-18

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