Climate change is contributing to increasing losses from floods and wildfires in many parts of the United States. These disasters have an important feature in common: their likelihood of occurrence and potential damages vary significantly across the landscape, with some areas at much higher risk than others. For example, barrier islands are more susceptible to coastal flooding, just as certain landscapes are much more susceptible to wildfire. These risky areas also tend to be high in amenities, often providing beautiful scenery and access to attractive recreational opportunities, which spur development. Development may be inefficiently high, however, since it is subsidized by government spending on infrastructure, utilities, and disaster aid when floods or fires occur. These areas also often benefit from federal or state disaster insurance when the private sector is unwilling to provide coverage at affordable prices given the risk.
In the early 1980s, Congress reduced the subsidies in coastal areas when it passed the Coastal Barrier Resources Act (CBRA). The CBRA prohibits federal financial assistance of any kind related to new development in designated coastal barrier areas. This forces private actors to bear the full costs of development. Could a similar approach be used to address escalating wildfire costs? Could Congress designate a “High Wildfire Hazard Resources System” to eliminate federal incentives to develop those lands?
The Coastal Barrier Resources System
The purpose of the CBRA, which was sponsored by two Republican members of Congress—Senator John Chaffee of Rhode Island and Representative Thomas Evans of Delaware—was to “minimize the loss of human life, wasteful expenditure of Federal revenues, and the damage to fish, wildlife, and other natural resources” along the coast. The CBRA defines a Coastal Barrier Resources System (CBRS) within which federal funding for new roads, bridges, utilities, and other infrastructure, federal spending through post-storm disaster relief, and flood insurance under the federally-run National Flood Insurance Program (NFIP) are banned.
The act stated that the CBRS was to be made up of “undeveloped” (fewer than one structure per acre) coastal barriers and other areas located along the Atlantic and Gulf Coasts as identified and mapped by the US Fish and Wildlife Service (FWS), the agency that manages the program. Every five years, the FWS is mandated to review the maps and, in consultation with state and local officials, may recommend modifications to the boundaries based on natural forces that have changed the lands. In January 2019, Congress passed an amendment that added 17,000 new acres, but also removed some units from the system. Currently there are 3.5 million acres of land in the CBRS, 40 percent of which are private lands and 60 percent natural areas owned by conservation organizations and government agencies.
By most accounts, the prohibition on new flood insurance policies and federal spending on infrastructure, utilities, and disaster aid has been a significant deterrent to new development. Homebuyers cannot get a mortgage without proof of insurance and a private insurance policy in these high-risk areas can cost several times what a policy from the NFIP would cost in a non-CBRS coastal zone. A 2007 study by the Government Accountability Office estimated that 84 percent of CBRS units remained undeveloped and of those that had seen development, the number of new structures was low. The law does not expressly prohibit development on private lands in the CBRS areas and in some high-amenity locations with strong real estate markets, persistent and deep-pocketed developers, and relatively weak state and local coastal land use regulations, development in the CBRS has occurred. Nonetheless, a recent study estimated that the law saved taxpayers $9.5 billion (in 2016 dollars) between 1989 and 2013.
A High Wildfire Hazard Resources System: Would it Work?
Similar to the CBRA, Congress could establish a High Wildfire Hazard Resources System (HWHRS) consisting of currently undeveloped areas with high wildfire hazard, where certain types of federal spending would be restricted. This would include infrastructure spending and federal disaster aid, similar to the CBRA. No national-scale insurance program like the NFIP exists for areas with high wildfire risk, but many states have programs that facilitate availability of affordable insurance in high fire risk areas where private companies may refuse coverage. Some states might be persuaded to restrict these programs as part of the HWHRS as it would also help constrain the growth of state wildfire management and suppression spending.
Establishing a HWHRS would face a number of challenges. The first is the size of area at risk of wildfires. By one estimate, wildland-urban interface (WUI) areas, where structures intermingle with, or are adjacent to, fire-prone vegetation, include more than 43 million homes in the contiguous United States and occupy 190 million acres. Of this, 25 million acres, an area a quarter of the size of California, are in the western United States where wildfire risk is highest. Within that western area, an estimated 86 percent of potentially developable WUI land area is currently undeveloped, meaning a HWHRS could be quite large. Compared with 3.5 million acres in the CBRS, an HWHRS could include substantially more land, and federal removal of spending in such a wide area would be sure to face political resistance. That said, the CBRS does not include all areas at risk of coastal flooding—only coastal barriers that also have high natural resource values, which is much smaller than the entire coastal flood zone (an estimated 19 million acres along the Atlantic and Gulf Coasts). Similarly, a HWHRS could be limited to only the highest wildfire risk areas, such as those in California that Cal Fire, the Department of Forestry and Fire Protection, designates as very high wildfire hazard severity zones. Another option might be to allow certain lands to be withdrawn from the system if communities adopt strict land use planning policies and building codes that minimize exposure to fire risk—for example, by maintaining open-spaces between forested areas and homes and mandating fire-resistant building materials.
Second, it would be difficult for the federal government to credibly claim it would restrict fire suppression in designated HWHRS areas, since fire might spread from those areas to undesignated areas. Thus, even though federal and state agencies spend more to suppress fires in developed areas, and this may be an important subsidy to development in high fire risk areas, restrictions on suppression spending would likely need to be excluded from such a policy.
Finally, mapping wildfire hazard areas is not as well-developed as floodplain mapping, and it may not be as clear which lands should be designated for inclusion as it is for the CBRS. While there is mapping by the USFS and some state agencies, such as Cal Fire, there would need to be agreement on which models to use in identifying the highest risk areas.
These challenges suggest that the political hurdles to passing federal legislation establishing a High Wildfire Hazard Resources System would be high. A worthwhile first step, in our view, might be a pilot program in one or more states, with federal funding for implementation. A pilot program could help to work out some of the difficult issues we described above and lay groundwork for a national program. Due to increasing development, the WUI is expanding rapidly—between 1990 and 2010, it grew in area by 30 percent and the number of WUI homes increased by 40 percent. These trends highlight the challenges in defining a HWHRS, but they also shine a light on the need for such a policy. We urge policymakers to look to the CBRA for guidance in addressing the growing wildfire problem in the United States.
