The Economic Impacts of Large Wildfires
New! Read our latest publications from this project. Working Paper 30: The Lost Summer: Community Experiences of Large Wildfires in Trinity County, California and Working Paper 31: Fire Suppression Costs and Impacts of the 2008 Wildfires in Trinity County, California present results of a case study on the economic impacts of wildfires on rural communities.
Learn more about our work in Trinity County, California.
About the Project
This project examines the local economic impacts of large wildland fires on rural communities across the US. It will help land managers, policy makers, and communities better understand, anticipate, and plan for the local economic effects of wildfires. We explore the relationships between fire suppression and local labor markets in non-metropolitan counties where the USDA Forest Service was the lead suppression agency, and where suppression expenditures exceeded $1 million across a variety of economic sectors by comparing economic conditions before, during, and after large wildfires in 2008. We are investigating whether:
1. Wildfires caused shocks to local labor markets;
2. Suppression activities offered short-term contributions to local labor and employment;
3. Post-fire restoration activities can contribute to longer-term labor market support.
The significance of large wildfires to rural communities
Large wildland fires can threaten property as well as the natural resource base on which many of rural communities rely. They can also create work opportunities for local businesses through fire suppression, post-fire recovery, and other associated activities.
Wildfires may have direct negative effects on local economies from reduced economic activity (e.g., resource management, tourism, and supporting industries) as well as direct positive effects from economic activity generated through fire suppression contracting.
Wildfires may also result in future local economic benefits from recovery and economic development efforts such as biomass utilization from fire hazard reduction projects. However, local economies only experience direct positive effects if fire suppression spending is done locally and future benefits are only possible if the fire stimulates, rather than stops, economic development efforts associated with recovery and forest restoration.
Rising fire suppression expenditures
Fire suppression expenditures have been rising over the past decade. Much of the nation’s fire suppression activities are contracted to private contractors, which presents an opportunity for local communities to replace the economic activities lost due to the fire. But between 2000 and 2005, the proportion of USDA Forest Service fire suppression budgets allocated to emergency equipment rentals and other contracts, which are more likely to be awarded locally, fell by over 50-percent. This decline represents a trend towards more national and regional contracts, increasing the likelihood of a net negative impact of wildfire on local communities.
Research questions
1. What are the effects of large wildland fires on local economies?
2. How does fire suppression contracting mediate those effects?
3. How do large wildland fires affect local economic development efforts, especially those related to biomass utilization associated with fire hazard reduction?
Project approach
We use a dual methods approach to understand the economic impacts of large wildfires. First, we use a quantitative modeling technique for estimating the economic shocks of natural disasters to ask (1): Is there a difference in the labor markets before and after the natural disaster compared to what happened in other, similar communities? We will examine the local economy as a whole as well as particular sectors. We will then examine the fire suppression expenditures to investigate the proportion of fire suppression contracts awarded to local businesses, and consider how that may have affected the fire’s labor market impacts.
Second, we have used a qualitative case study to document what happened during and after a series of large wildfires in Trinity County, California. We interviewed land managers, county leaders, nonprofit organization staff, contractors, and landowners. We asked questions about community and economic impacts of the fires during summer 2008; how the fires may have changed biomass utilization strategies; how the fires may have changed public lands management; and opportunities and challenges that have arisen for Trinity County communities since the fires.
