(CNBC) -- When the last embers cool on the wildfires now spreading across more
than 750,000 acres in 10 Western states, the economic toll could be 30
times higher than the cost of simply dousing the fires, a major issue
as cities and states struggle with shrinking budgets.
cost of fighting fires keeps rising, the effort is diverting funds from
other forest management programs designed to reduce fire risk. And
experts say the economic damage is being vastly underestimated in the
initial headline numbers for the fires raging through an area out West
that is the size of Rhode Island.
Beyond the financial cost of
the firefighting effort, the human toll this fire season has been
unusually high as well. So far 30 wildland firefighters have died in
2013, including 19 elite fighter fighters trapped last month in a
13-square-mile blaze in Yarnell, Ariz.
More than 50 large fires
were burning this week. So far this season, more than 260 have already
been contained, according to the National Interagency Fire Center. The center this week raised the nation to the highest preparedness level for the first time in five years.
latest outbreak included a California inferno on the outskirts of
Yosemite National Park that threatened more than 2,000 buildings and
forced the evacuation of camps and remote rural homes. In central
Idaho, a 100,000-acre fire forced the evacuation of 1,250 homes in the
Idaho resort areas of Ketchum and Sun Valley.
With new fires
breaking out this week, and nearly 18,000 people at work containing the
blazes, the fire center was struggling to fill all requests for crews
and equipment from areas where fires were burning out of control. As of
this week, the total spending so far this year topped the $1 billion
Last year, the bill for wildland firefighting topped $1.9
billion-the second highest on record-as the relentless pace of
development in fire-prone areas continues to expand the area at risk
and tax already stretched resources.
Since 1960, the cost to
federal, state and local governments to fight wildland fires has also
mushroomed from less than $100 million to more than $3.3 billion,
according to a report by a panel of public and private groups working
to try to better manage the risk of wildland fires.
are increasingly siphoning money from forestry management programs-like
clearing timber and brush in high-risk areas-geared toward reducing
the scope and severity of fires, according to Caitlyn Pollihan,
executive director of the Western Forestry Leadership Coalition, a group
of state and federal forestry management agencies.
budgets have not increased," she said. "So over time the suppression
costs have taken more of the bigger piece of the pie, leaving less for
forest management activities and other preventive work."
year, with money running out at the peak of the firefighting season, the
U.S. Forest Service is taking $600 million from timber, recreation and
other programs to fill the gap. A spokesman said the agency had enough
money to cover just a few days of firefighting costs before making the
The government has repeatedly diverted funds
designated to thin national forests to prevent wildfires, despite a
2009 law known as the FLAME Act that dedicated funds for that purpose.
the long-term cost of shortchanging those forest management programs is
much bigger than the annual firefighting cost of about $1.5 billion, a
figure that badly understates the true cost of wildland fires,
according to the coalition.
Based on a review of detailed
studies of the long-term economic impact of past fires, the group found
that the total economic impact of a wildland blaze can run to as much
as 30 times the cost of putting it out.
the immediate expensive of repairing and replacing homes and other
structures damaged or destroyed by fire, a full accounting of the
long-term impact includes a host of other costs.
losses-from crop or property damage to lost business-are fairly clear
cut and often covered by insurance. Last year, for example, some 38
catastrophic wildfires in the U.S. produced $1.1 billion in economic
losses-about half of which were covered by insurance, according to
estimates in a January 2013 report by Munich Re.
losses represent more than the cost of repairing or replacing an
uninsured burned home or other structure. Homes that remain standing in
badly burned neighbors may lose property value. A business near
recreational parklands may survive the fire but succumb to the impact
of lost tourist traffic.
Wildfires also produce a series of
indirect, short-term impacts that are often overlooked in a full
accounting of the cost. Health-care costs from people breathing
smoke-filled air or the loss of safe drinking water are not usually
accounted for, according to the coalition report.
impacts also can be more difficult to tally in the case of wildfires
because environmental damage can last for years or decades. Scorched
landscapes stripped of vegetation are much more prone to flooding, for
example, increasing the risk of additional damage that may not be
included in the initial assessment of a fire's impact.
is clear: The overall economic damage inflicted by U.S. wildfires is
increasing rapidly-largely because the pace of development in fire-prone
areas shows no signs of slowing. Of the roughly 600 million acres of
federal, state, local government and private wildlands near urban
areas-the so-called wildland urban interface-about a third is already
Since 1990, the rest has been built out at rate of about 2 million acres per year-or about 3 acres per minute, according to a 2008 report by a panel of public and private groups working to try to better manage the risk of wildland fires.
Of the 17 million homes built between 1990 and 2008, some 10 million were constructed in wildlands near urban areas, according to Corelogic,
a real estate research firm. Today, about 40 percent of the 115
million single-family homes in the U.S. are in areas prone to fire
risk. More than 740,000 of those with estimated value of more than $136
billion are at "high" or "very high" risk, the firm found.
result has been a sharp increase in the number of homes consumed by
wildfire. As recently as the 1960s, roughly 200 homes a year were lost
to wildfires, inflicting about $3.5 million in insured damage. By the
2000s, that number had jumped to an average of 2,700 homes costing
roughly $800 million a year in losses.
And that rising cost of
fire-damaged homes further boosts the cost of insurance premiums for
all homeowners living in wildland areas, according to Robert Hartwig,
president of the Insurance Information Institute.
"To the extent
that more structures are being built in vulnerable areas, that is
leading to higher insurance cost for people who live in those areas," he
said. "The cost of insuring property in most parts of the country is
rising because of an escalation of natural disasters."
John W. Schoen, CNBC