Building resilience to wildfire in the United States

Students from the Johns Hopkins University School of Advanced International Studies (SAIS) collaborate with Swiss Re to examine innovative strategies to help governments better manage financial risk from severe wildfire seasons

Johns Hopkins SAIS student researchers collaborated with global reinsurer Swiss Re to publish a study furthering the understanding of natural disaster management policy and develop a platform for unlocking resources to build climate resilience. 
 
Released today, “Fueling Resilience: Climate and Wildfire Risk in the United States” examines public financing for wildfires and the role that risk-transfer tools can play in enhancing the resilience of state budgets. As California endures one of the worst fire seasons in the state's history, and the U.S. Forest Service is on track to spend over 50% of its budget putting out fires, policymakers must consider new and innovative solutions to manage wildfire costs.
 
The complete cost of wildfires includes firefighting and recovery costs as well as a number of indirect impacts of the wire on watersheds, tourism, property values, tax revenues, public health, and the environment. Many of these costs are shouldered by governments, who receive assistance from the U.S. Forest Service. However, the Forest Service has exhausted its fire suppression funds in 8 of the past 13 years, thereby requiring re-routing of funds for other important programs, including wildfire prevention. This causes significant disruption to the Forest Service and is ultimately a non-sustainable process for funding suppression.
 
There is also a limit to the relief that is being provided by insurance. Oregon, for example, has maxed out its catastrophic wildfire insurance the past two years in a row. As these extreme fire seasons continue, federal and state governments alike are approaching a threshold for accommodating continued increases in costs under current funding structures.
 
"Currently, most US states lack a sustainable financial strategy to respond to the changing climate landscape. Although individual decision-makers largely agree that the ‘rear-view mentality’ regarding wildfire costs is no longer acceptable, the urgency of covering immediate fire suppression needs limit the resources and capacity available for long-term planning,” explains Alex Kaplan, Senior Client Manager, Swiss Re Global Partnerships. "Although financing natural disasters through private insurance markets remains a frontier arena, the western states of the US have demonstrated leadership in proactively addressing climate change and now have the opportunity to redefine wildfire resiliency."
 
“A sustainable wildfire management strategy would anticipate growing suppression costs and ensure that financial instruments were in place to protect public budgets from disaster-induced shocks,” said Celeste Connors, former White House official on climate change and Johns Hopkins SAIS faculty advisor. “There is insufficient public funding available to address the scale of this challenge, which is increasing due to climate change. Innovative partnerships and strategies identified in this report are needed to help leverage public resources to reduce risk and improve community resilience."
 
The full report is available for download at: “Fueling Resilience: Climate and Wildfire Risk in the United States”

For more information about this report and interview requests, please contact Celeste Connors at 202-330-3809 or [email protected]. 
 
This is the second in a series of collaborations between Swiss Re and Johns Hopkins SAIS focusing on catastrophic risks and policy strategies. The prior report can be found here: “Own Your Risk: Reframing Risk and Resilience in the Columbia River Basin.”
 
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