Managing Fire for the Best Value for Money
Fire managers have to face a multitude of competing priorities when considering how to reduce losses from future bushfires. With limited funds, an increasing population to protect from bushfire, and more people living in bushfire-prone areas, fire managers face a significant resource allocation challenge. Knowing which bushfire-risk mitigation strategies provide the best value for money is therefore potentially of great benefit.
The Bushfire CRC study, Integrated assessment of prescribed burning, used quantitative analysis that combined information about risk, management strategies, costs, and values in a spatial context, together with high levels of stakeholder consultation. The results highlight the fire risk management strategies that are likely to produce the highest benefit per dollar spent.
What did we do?
Two case studies were undertaken, the first in Central Otago, New Zealand and the second in the Mount Lofty Ranges, South Australia.
The Central Otago case study was supported by the New Zealand National Rural Fire Authority. Stakeholders from the Department of Conservation, fire authorities and farmers were brought together to establish a direction for improved fire risk management. The aim was to evaluate a range of fire-prevention strategies (including prescribed burning) in different parts of the region.
In the Mount Lofty Ranges, the focus of the analysis was on selecting the locations and areas of prescribed burning that provided benefits greater than costs The Department of Environment, Water and Natural Resources, Forestry South Australia and South Australia Water were all involved as government agencies with key landholdings in the region. In both studies, extensive consultation was undertaken with scientists, fire regulators, local experts and land managers.
How does it work?
The study is adapted from experience with the Investment Framework for Environmental Resources (INFFER) model, to account for fire risk, fire spread, the damage caused by fires of different severities, asset values, weather conditions, impacts of fire-prevention options, and costs of those management options. It estimates the benefits and costs of various fire risk management strategies that aim to protect various assets, such as homes, plantations, biodiversity, life, industrial and commercial assets and infrastructure. The benefits are calculated as reduced damage to the assets and reduced suppression costs.
A baseline level of expected losses due to fire is estimated for a baseline scenario. The levels of losses depend all of the factors listed above. The calculations are repeated with a particular management strategy in place. The difference between the two results (with and without management) indicates expected net benefits of introducing the additional management regime, relative to the baseline.
The benefits are measured as expected benefits, depending on the probabilities of different possible outcomes. This is important because the benefits and costs vary substantially from year to year, depending on factors such as the weather. Results should be viewed as providing an indication of average benefits per year over a long run of years. This information, combined with the cost of the management strategy, is used to calculate a Benefit: Cost Ratio (BCR) for each strategy. Users can simulate many different strategies for bushfire risk management and observe the estimated BCRs for each.
What did we find?
For the Central Otago case study, the prescribed burning strategies favoured by some stakeholders were shown by the model to be a poor investment. Instead, strategies that reduced the number of fires starting within the town itself were the best value.
In the Mount Lofty Ranges case study, the findings complemented those by Gibbons et al. (2012) and Penman et al. (2014) in that reducing vegetation cover close to high valued assets reduced fire risk more than doing so further away from assets.
Findings drawn across both case studies are highlighted below. Full research findings and more detail are available in Gibson and Pannell (2014).
- Various fire risk management strategies have potential to generate benefits, but they should be carefully targeted. This was particularly the case for prescribed burning in the Mount Lofty region, where a general prescribed burning strategy across all sub-regions does not provide value for money, but prescribed burning in targeted sub-regions does.
- Some strategies have particularly high costs and these are unlikely to provide value for money unless they can generate exceptional levels of fire prevention. The high cost is usually because strategies required actions over a large area.
- Benefits from reductions in fire spread from one zone to another were relatively low in both case studies. The majority of benefits were generated from strategies that were applied within or close to the valuable assets. Although information about fire spread was relatively weak, results were not sensitive to changes in the assumptions about spread within plus/minus 50%.
- On average, benefits from reducing asset losses are much larger than benefits from reducing suppression costs.
- The most severe fires tend to cause the majority of losses, even after allowing for the fact that these are rare events. This means that the majority of benefits from fire management occur in rare events. In between those rare events, strategies that offer good value for money on a long-term probabilistic basis may have costs in excess of benefits in most years.
The quantity and quality of available data was low for a number of key parameters. Some information was not collected, and some was not in an easily interpretable format. In both case studies the model results were found to be sensitive to several variables about which uncertainty was high. These provide a potential focus for future data collection.
Where to now?
Being the first study of its kind in Australia or New Zealand, a number of challenges were faced, particularly around availability of suitable data. Experience in other contexts (e.g. natural resource management and agriculture) shows that, even for issues where technical research has been conducted, it is common for that research not to provide the specific data required for integrated economic assessment. This proved to be the case in this study too.
Integrated economic assessments have great potential to contribute to thinking and decision making about fire management. It is hoped that the examples of these case studies will lead to additional studies.
Guidelines have been developed to assist fire managers to help prepare for similar integrated economic assessments. To access the guidelines in an easy to follow format, download Bushfire CRC Fire Note 124 from www.bushfirecrc.com/firenotes.
The study is being expanded in a new research project by the Bushfire and Natural Hazards CRC. The new project aims to fill key knowledge gaps for hazards such as earthquakes, floods, cyclones and tsunamis to illuminate the merits of different decision options. It spans issues related to values, risks, and decision making to deliver value for money from public investments in natural hazard management. See www.bnhcrc.com.au for a full description of the project.