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

Wildfires can be considered a 'public bad, or disservice from forests, bushlands, and other biomass-accumulating land-cover types.' Fire impacts can affect not only landowners’ own property, but also extensive surrounding society within a defined ‘firescape’, creating a spatial externality problem: landowners and managers may come to underinvest in wildfire risk reduction, due to their insufficient organisation, know-how, capacity, and/or motivation.
If so, this would justify policy intervention, the authors add, aimed at reducing wildfire risk more than land managers themselves would have done. To the extent that land managers’ own motivation is insufficient, it argues, incentivising and compensating them for incremental risk reduction costs can be one recommendable pathway (‘carrots’). Using disincentives (e.g. taxes, fines, liability fees) can be a complementary strategy ('sticks’). Conceptually, wildfire prevention activities reduce the probability of wildfires breaking out (ignition risk), while mitigation activities reduce the potential impact of wildfires (spread, intensity) when they occur.
Jointly, prevention and mitigation constitute wildfire risk reduction, which tends to provide long-term cost-effective solutions, compared (and complementary) to the traditional suppression-focused public-spending. It can involve multi-stakeholder actions towards fire resilient landscapes, requiring a shift from top-down mitigation to the active engagement of local actors.

This policy brief will review what economic incentives have been applied in Europe (where the bulk of action has occurred) and beyond, for wildfire risk reduction by landowners, managers, and their communities, and what we at this stage can learn from these experiences.