An Economic Analysis of Bushfires Management Programs

Allocating scare resources for fire management strategies requires information on the extent of economic losses from bushfires and the efficiency of alternatives. Despite the severity of bushfires, there is no agreed approach in Australia for estimating economic losses from fires nor for evaluating the economic efficiency of alternative suppression strategies. The poster proposes approaches to assess the economic effects of bushfires on local and state economies and sets out models to evaluate the economic efficiency of two key bushfire management strategies: presuppression and suppression. The first model arises from questions concerning the value of pre-suppression (before the fire) fuel reduction activities, and the estimation of an economically optimal fire management budget. The fuel reduction burning aims to reduce losses from a major fire event. To determine how the budget should be allocated, a modification of the Cost plus Net Value Change model is being used. This model has the advantage that each of the influencing parameters is easy to adjust or even change for different areas in Australia. The second model allows straightforward comparisons of approaches to bushfire suppression, through a fire simulation model. The simulation allows comparisons of alternative strategies under similar fire conditions. The economic utility in suppression of fire engines, dozers and aircraft is evaluated using Cost Benefit Analysis and a Cost plus Loss framework. The paper presents useful tools for decision makers to make damage assessment from fire, resource allocation on pre-suppression and guidelines for operational decision making on suppression approaches.