Endogenous Outcomes from Climate Catastrophes: Evidence from Wildfires and Wildfire Suppression

Date and Time
Location
157 Hosler Building
How risks evolve under climate change will depend both on how alterations to natural systems affect hazards and how humans respond. Nevertheless, most climate change risk assessments focus on natural system drivers and outcomes. Wildfire activity in the western U.S. and damage caused by wildfires have increased dramatically over the past several decades, but among natural hazards, human responses to wildfire may be particularly effective. In this paper, we develop a simplified spatial-dynamic theory of wildfire suppression decision-making, which we use to motivate a novel and tractable empirical model of wildfire management. We estimate the effect of threatened resources on wildfire suppression effort, using outputs from a state-of-the-art wildfire simulation tool to control for physical factors (e.g. terrain and vegetation) that affect fire spread and may be correlated with threatened resources like homes. We find that the probability a fire ceases its spread increases as fire approaches assets of concern to fire managers. All things equal, increasing either the number or average value of houses at a given location within a fire's potential path decreases the probability the fire burns through that location. These differences almost certainly reflect the impact of fire suppression activity on behalf of homeowners and are likely to meaningfully reduce the overall costs of structure loss due to climate-driven increases in wildfire. The results also suggest that owners of higher value properties are more likely to benefit from management responses than owners of lower value properties.