Policy Brief: Can economic incentives help reducing wildfire risk? Reviewing economic tools to motivate more fire-resilient land management

This policy brief highlights the spatial externality problem of wildfires, where landowners may underinvest in wildfire prevention and mitigation due to limited resources, knowledge, or motivation. Policy interventions can address these gaps using incentives (“carrots”) such as compensation for risk-reduction activities and disincentives (“sticks”) like fines or liability fees. Prevention activities reduce ignition risk, while mitigation activities lower the potential impact of fires, together forming a cost-effective wildfire risk reduction.

Key messages highlighted in this policy brief:
1) What fire-related economic incentives are currently out there?
2) How to adequately contextualize incentives?
3) How to increase impacts through improved incentive design?
4) How to better implement impact-oriented incentive-based strategies?