Justifying Investments into the Future
This article was published in the Spring 2013 edition of Fire Australia magazine.
The ability to rationalise decisions economically, and to understand how future bushfires will affect communities, the environment and the economy are necessities in fire and land management.
The fire and land management sector has been accused in the past of forever looking backwards. The swathe of reviews and inquiries over the past decade has seen agencies caught up in implementing recommendations based on that last big fire, rather than preparing for the next one. But forward thinking is exactly the aim of the two-part ‘Future Scenarios and Economics’ project at the Bushfire CRC.
“We are exploring the effect of global and climate change on future fire regimes,” explained project leader Dr Geoff Cary from the Australian National University.
“We are looking at understanding the effects of change. How temperature and precipitation are changing, changes in atmospheric carbon dioxide concentration and how we might use the land differently. These will all affect future fire regimes in our landscapes.”
“What will the length of the fire season be in different parts of the country? How intense will fires be, and will they occur more frequently? Understanding these issues will have important consequences for assets that matter to society.
“Understanding what fire may look like in our environment in the future can be used to understand future risk to communities,” he said.
Understanding changes in demographics, population, vegetation and land use, coupled with how cities and interface and peri-urban areas develop, is essential for fire and land management moving forward, believes Andrew Stark, Chief Officer at the ACT Rural Fire Service and project lead end user.
“These issues are important for us to be able to understand,” Mr Stark said.
“If agencies are going to be able to evaluate, using our economic models of the future, a range of decisions that are made with some really long-term outcomes, we need to recognise what our environment is going to look like in the next 20, 30 or even 50 years.
“This comprehension will enable agencies to play a role in influencing land use planning, building codes and other parts of regulated government,” Mr Stark said.
What does the study of economics offer the fire and land management sector? Quite a lot, according to economics project leader Professor Steven Dovers.
“Fire and land management agencies need to be able to make good investment decisions and to be able to justify those to their stakeholders,” said Professor Dovers, Head of the Fenner School of Environment and Society at the Australian National University.
The increasing demands on the fire and land management sectors have really driven this project.
“The research has been looking at the role that different economic modes of analysis can play in helping to inform decisions, make trade-offs and really pointing to the best areas to be invested in.
“This could be a cost–benefit analysis that looks at all the different assets—both built, and things like water catchments and biodiversity—to try and look at how economics can actually help management decisions. Part of that is to really look at the many different decisions that are made in fire and land management, and therefore what are the questions we really need to be able to answer,” Professor Dovers said.
Andrew Stark agrees, but added that many economic models played a part.
“Models beyond the standard cost–benefit analysis have been analysed by the research team. Models such as decision-support frameworks, political–economic analysis and institutions and human behaviour all can add value.
“It is really all about how agencies can use these different frameworks to answer their questions and inform decision-making,” he said.
The aim is to provide a tool for end users to identify where different economic methods can assist their fire management and policy challenges across diverse decision-making contexts. Table 1 (see full magazine) outlines an example using prescribed burning to illustrate the links between critical management and policy questions and the areas of economic analysis that could be applied to evaluate and support decisions.
Also helping to inform decision-making is Bushfire CRC PhD student Veronique Florec.
Based at the University of Western Australia, Ms Florec is exploring the application of economic analysis to prescribed burning strategies.
“I’m looking at different investments in prescribed burning. We want to know what the implications of changing a particular strategy are, and what comes out as a result in terms of suppression cost and damages when prescribed burning strategies are modified,” she said.
“What I’m looking for is what strategy minimises the sum of all the costs—prescribed burning costs, suppression costs and damages,” Ms Florec said.
To put it another way, what is the optimum amount of money to spend on prescribed burning to see a meaningful result in the reduction of fires or the amount of money spent on suppression?
“It is important to see that there is a point where too much investment in prescribed burning might actually offset the potential benefits,” cautioned
“What I have found so far is that there is a wide range of strategies that are near optimal in terms of minimising total costs,” she said.
Bringing it all together
Andrew Stark believes the research conducted under this two-part project will enable agencies to present long-term plans to government and the community with confidence.
“The research is highly regarded because of all the fiscal pressures the states and territories are under,” Mr Stark said.
“The ability to go forward to government and the community with really robust, long-term proposals that are cost–effective and will produce great outcomes is vital.
“The next step for agency end users is to develop our capacity to understand which economic frameworks to apply to which question, and how to ensure quality data is sourced for the models to ensure robust outputs,” he said.