Incentives, not fuels, are endangering forests

By now, practically everyone in the U.S. has heard the story about forest fires: that the Forest Service has been suppressing fires for 90 years, leading to a massive build-up of fuels just ready to explode. That’s why we’ve seen so many severe fires in recent years, and why Congress had to give the Forest Service and Department of the Interior nearly $3 billion last year to put out fires and address the fuels build-up.

Everyone believes this to be true. I believed it too. But when I sought facts to confirm the story, I couldn’t find them. All the data I found indicate fires today are no worse than would be expected considering recent droughts. This suggests the billions of dollars Congress is spending on fire are mostly wasted. Worse, if past experience is any indicator, this spending will have serious unintended consequences for the future of forest ecosystems.

Recent fires fairly typical

I first looked at the acres burned. Wildland fires burned more acres in 2000 than in any of the previous 40 years. But the average of the last five years, 4.7 million acres per year, is only slightly more than the 4.6 million acres burned per year in the early 1960s. Since 1960, the five-year average of acres burned has fluctuated between 2.7 and 5.3 million acres depending on the drought cycle.

I became even more suspicious when I looked at firefighter safety. The number of firefighters killed has grown from an average of eight per year in the 1950s to 17 per year in the 1990s. At first glance, this suggests fires have grown more dangerous.

Not so. The number of firefighters who died from fires has fallen, from 6.5 a year in the 1950s to 5.5 a year in the 1990s. But the number who died in aircraft and motor vehicle accidents increased dramatically, from 1 per year in the 1950s to 6 per year in the 1990s, suggesting the Forest Service is making a lot more use of such vehicles. Health problems, mainly heart attacks and strokes, caused most of the remaining deaths: one-half per year in the 1950s, growing to 5 per year in the 1990s. That suggests an aging Forest Service workforce, not fuel accumulation.

Data on the cost of fire suppression also fail to support the fuels theory. By all accounts, the cost of suppressing fires is growing dramatically. Since 1994, we have experienced five of the six most expensive fire years in history. But Forest Service economists who took up this issue in 1999 attributed virtually all of the increased cost to inflation. Despite record fire costs in 1994, and a near-record in 1996, they found “no statistically significant trend” after adjusting for inflation.

Of course, 1999 was another expensive fire year, and 2000 proved another record breaker. But the high costs of fire suppression in those years can be attributed to causes other than a build-up of fuels.

Between 1998 and 2000, the planet experienced the longest La Niña ever recorded. La Niña is a movement of cool water in the Pacific Ocean that leads to droughts in much of the U.S. Fire managers blamed the expense of fire suppression in 1999 and 2000 on this drought, not accumulated fuels.

Protecting homes

The increasing number of homes in the wildland-urban interface is a second reason for higher fire suppression costs. The West has been the nation’s fastest-growing region for at least two decades. The Federal Emergency Management Agency (FEMA) estimates 38 percent of the homes built in the West are in the wildland-urban interface. The Forest Service has responded by spending extraordinary amounts of money to protect homes.

There’s no doubt the Forest Service is spending more money to protect homes, but even this problem may be exaggerated in much of the West. During the 1990s, the vast majority of homes burned by wildland fire were in California, and most of those were built near chaparral forests in the central and southern regions of the state.

While chaparral fires are a problem, they don’t justify spending billions of dollars to protect every rural home in the West. Wildland fire is responsible for less than 0.2 percent of all structures damaged or destroyed by fire each year. So few homes in the wildland-urban interface are lost to fire that the insurance industry can’t generate enough data to justify discounts to homeowners who fireproof their homes with non-flammable roofs and landscaping.

Blank checks lead to counterincentives

A third reason for increased firefighting costs is incentives. In 1908, Congress gave the Forest Service a blank check to put out fires. This led many firefighters to joke, “The Forest Service fights fires by dumping money on them.” But in 1975 the Office of Management and Budget (OMB) started pressuring the Forest Service to control its fire costs.

Congress helped by repealing the blank-check law in 1978. In the 1980s, instead of giving the Forest Service a blank check, it gave the agency a fixed amount for fire suppression each year—usually $125 million—and expected the agency to cover deficits from bad fire years out of the surpluses from good years.

That worked until the back-to-back “siege of 1987” and “Yellowstone (and Alaska) fires of 1988.” The Forest Service spent $722 million fighting fires in those two years, dipping into Knutson-Vandenberg (K-V) reforestation dollars to cover the deficit. Congress responded by upping the annual fire suppression appropriation to $375 million. The Forest Service begged and pleaded until Congress finally paid back the K-V fund out of tax dollars in 1990.

After this episode, the Forest Service returned to its blank-check perspective. Technically, Congress still gives the Forest Service a fixed amount of money for fire fighting. But if costs exceed that amount, the President can authorize the Forest Service to spend more out of an emergency contingency fund. Of course, the President rarely says “no” to the Forest Service, which has drawn on this contingency fund every year since 1993.

When its check-writing hand was tied by Congress and the OMB, the Forest Service spent an average of $163 million per year on fire suppression in the 1980s. With those constraints removed in the 1990s, per-acre suppression costs grew by 35 percent, even after adjusting for inflation. Most of the increase seems due to the change of incentives rather than to weather, the wildland-urban interface, or built-up fuels.

An extravagant waste

If data on acres burned, lives lost, and dollars spent doesn’t support the accumulated fuels theory, what does? No measurements of fuel accumulation exist. While top government officials blame recent fires on fuels, all of the on-the-ground reports I’ve read focus on the weather.

There might well be a build-up of fuels, but that problem isn’t as important as the popular story has led us to believe. Incentives are much more important than any other factor, even the weather. Congress is wrongly focused on treating fuels, when it should focus on fixing incentives.

After the Cerro Grande fire burned 200 Los Alamos homes to the ground in 2000, Congress began a firestorm of spending on anything to do with fire: presuppression, suppression, hazardous fuel treatment, research, and assistance to states and local communities. The agencies dignify this spending by calling it the National Fire Plan, but it is really just an even more extravagant case of dumping money on fires.

Federal land fire budgets had already grown from a few hundred million a year in the early 1990s to $1.5 billion in 2000. But the National Fire Plan nearly doubled the budgets again, to $2.9 billion in 2001. The Park Service, Bureau of Land Management, and other Interior Department agencies got some of this money, but the Forest Service spent two-thirds of it.

Budgets for treating hazardous fuels have grown from about $20 million a year in the early 1990s to $400 million a year today. The Forest Service and other agencies say the funds are needed to treat the 70 million acres of federal land at high risk of fire due to past fire suppression and accumulated fuels. Because the fire risks are so high, they often don’t dare use prescribed fires and instead must thin or otherwise mechanically treat these acres, a more expensive approach.

As a result, the Forest Service is treating only 2.0 to 2.5 million acres a year, which means it will take at least 30 years to treat all condition class 3 acres, by which time many of the 140 million acres currently rated moderate fire risk will have developed into a high-risk condition.

The Forest Service says it focuses on high-priority acres, such as lands in the wildland-urban interface. But spending hundreds of dollars an acre treating federal lands near private homes will not guarantee the safety of those homes in an extremely severe fire year. On the other hand, their safety can be guaranteed by homeowners fireproofing the homes with non-flammable roofs and landscaping.

According to Forest Service fire researcher Jack Cohen, homes and other structures will burn only if they have flammable roofs or if there is burnable vegetation or other fuels within 140 feet of the structures. Just one or two acres around each home—not thousands of acres of federal lands near homes—require treatment. Instead of treating its own lands, the federal government could share the costs of treating private homes, and then let fires on the federal lands burn.

Presuppression inefficiencies

Instead of letting fires burn, however, Congress has nearly quadrupled presuppression costs. Presuppression or preparedness refers to the cost of having firefighters, aircraft, and other equipment and supplies on standby for when fires break out. In the early 1990s, the Forest Service’s presuppression budget averaged $165 million a year. Today it is $620 million. Adding Interior Department agencies brings the total to more than $900 million a year.

Since 1980, the Forest Service has tried to convince Congress that increased spending on presuppression would reduce total fire costs. Having more crews on standby, the theory goes, allows the Forest Service to suppress more fires more quickly at a lower cost. The Forest Service supported that theory with the National Fire Management Analysis System (NFMAS), a computer model Forest Service officials claimed calculated the most efficient level (or MEL) of presuppression funding.

Congress was never really convinced, however. It typically appropriated to the Forest Service only 70 to 80 percent of MEL for presuppression. Since the 2000 fire season, however, Congress has been giving the Forest Service 100 percent of MEL. By an amazing coincidence, the Forest Service’s MEL calculations have doubled, from about $300 million a year in the mid-1990s to more than $600 million a year today.

The increase in presuppression funding hasn’t fulfilled the promise of reducing firefighting costs: Though 2001 was a relatively mild fire year, with less than the average number of acres burned, the agencies spent $151 an acre on suppression. In 1997—when about the same number of acres burned but the Forest Service was funded at about 80 percent of MEL—the agencies spent just $44 an acre (adjusted to 2001 dollars) on suppression.

Let it burn

Why not let some fires burn? If suppressing fires has been so expensive, and has permitted a fuel build-up, wouldn’t it be better simply to not suppress some of them? And if we let some fires burn, couldn’t we spend less on presuppression and suppression?

Under a 1995 fire policy approved by the secretaries of Agriculture and Interior, federal land managers can allow fires to burn—they call it “wildland fire for resource use”—only if (1) they have written an approved fire management plan; (2) that plan allows fire for resource use; (3) the fire meets conditions specified in the plan; and (4) the fire was started by natural causes.

As of March 2002, the Forest Service had completed fire management plans for just half of its forests. Few, if any, of those plans allow fires to burn outside of large wilderness areas, effectively excluding more than 80 percent of the National Forest System. Since 88 percent of fires are human-caused, managers can allow no more than about 1 percent of all fires to burn.

The actual figure is even smaller. In recent years, federal managers have allowed only about 0.3 percent of fires to burn, and those fires have covered only about 2 percent of total burned acres.

So it is not surprising the Forest Service’s NFMAS model presumes all fires will be suppressed. In fact, although the model is supposed to calculate the value of resource losses as well as presuppression and suppression costs, it is strangely insensitive to resource losses. Even if the resources being protected from fires were worth nothing, the model would propose about the same most efficient level of presuppression costs.

Lately, it seems the federal land resources being protected from fires are worth nothing. Timber was the resource whose value the Forest Service traditionally plugged into the NFMAS model, but national forest timber sales are down by more than 80 percent from pre-1991 levels. Most other resources aren’t really harmed by fire, and many benefit. It is true that really bad fires can fry soils and lead to erosion, but the Forest Service hasn’t ever proven it can stop those fires.

If resource values don’t change NFMAS results, the model is little more than a scam to get more money from Congress. Yet the Forest Service used NFMAS to convince Congress to fund 50 percent more firefighters, hundreds of new fire engines, dozens of aircraft, and scores of new firefighting facilities. And what do we get for it? More fire suppression, which is supposed to be the opposite of what the forests need.

Fuel not the problem

Is there any scientific support for the fuels theory? Recent Forest Service fire documents and papers in scientific journals repeatedly point to one publication in support of the fuels theory: a report concluding that, because of past fire suppression efforts, “vegetation has accumulated, creating high levels of fuels for catastrophic wildfires and transforming much of the region into a tinderbox.” Who issued the report? The General Accounting Office.

The people at the GAO are accountants, not fire ecologists. Even the Forest Service thought the report was misleading, saying that changing firefighting strategies, not increased fuels, were responsible for recent increases in acres burned.

The GAO blamed the deaths of 14 firefighters in the 1994 South Canyon fire on excessive fuels. But, as the Forest Service pointed out, “The South Canyon Fire was in oak/brush type vegetation and is not representative of the short fire interval, long needle pine vegetation of the interior western forests. Excessive fuel loading on the South Canyon Fire was not a causal factor.”

Forests characterized by short-interval, low-intensity fires are most susceptible to fuel build-up and best treated by reducing fuels. According to a recent paper by Forest Service fire researchers, only about one-third of the nation’s wildlands, most of them located in the Deep South, fall in this category. In the West, two-thirds of the lands are ecologically adapted to stand-replacement fires, and another 15 to 20 percent are adapted to mixed-severity fires.

This means spending billions of dollars on fuel treatments will be no more effective than spending billions of dollars on presuppression to stop western wildfires. Fuel treatments are important in the South, where most forests are on a short-interval, low-intensity fire cycle, but in the West fuel treatment efforts are as much a chimera as NFMAS and MEL.

Real ecological danger lurks in all this wasted money. With few incentives to do otherwise, the Forest Service is likely to spend its bounty from Congress on practices that will prove just as harmful in the long run as fire suppression. As it has already done in the South, the Forest Service may try to convert western forests adapted to severe fires to forest types adapted to low-severity fires. Or it may impose fires at fixed intervals of, say, 25 years on forests adapted to varying intervals of perhaps five to 50 years. Either approach will reduce forest diversity.

A long history of fraud

The fuel treatment myth is just the latest in the Forest Service’s century-long history of misleading Congress to gain bigger budgets and more power. As Ashley Schiff documented in his 1962 book, Fire and Water, to convince Congress to purchase national forests east of the Mississippi, fund western forests, and give the agency more authority over private lands, the Forest Service suppressed and ignored its own research, demonized researchers in other agencies, and knowingly lied about fires and flooding.

After 1950, the Forest Service bragged for decades that it was one of few government agencies to earn a profit. But its “profits” were based mostly on Enron- and WorldCom-like accounting tricks. Like Enron, it counted receipts that weren’t really there, such as the cost of roads built by timber purchasers. Like WorldCom, it treated operating costs as capital costs. More daringly than either Enron or WorldCom, it amortized certain capital costs over hundreds of years and in some cases over eternity (effectively zeroing them out).

After correcting for these accounting tricks, the Forest Service did earn a profit: in 1969, and in four or five years in the early 1950s. Otherwise, it has cost taxpayers hundreds of millions to billions each year.

From 1950 through 1990, the Forest Service supported its timber program on a web of misleading statements and data. It said Douglas fir and other forest types “needed” clearcutting to regenerate (they don’t). It said it could sustain 12 billion board feet or more of timber cutting forever (it couldn’t). It said timber cutting benefitted most recreation and wildlife (only those kinds not in short supply). Though national forest timber sales have fallen by 82 percent, Congress is still giving the Forest Service nearly as much money as ever for timber management.

Compared with fire, timber is small potatoes. Even in its heyday, timber never contributed more than about $900 million a year to the Forest Service budget. Fire added more than $1.9 billion to the Forest Service’s 2001 budget, and it will probably be more in 2002. Mainly because of fire, the Forest Service’s budget jumped nearly 50 percent in 2001.

I like the Forest Service and I respect the people who work for it. But one of the most important jobs of a bureaucracy is to filter information, and the bureaucracy can always be counted on to filter the information in a way that benefits the bureaucracy. Everyone in the bureaucracy can be perfectly honest, yet the bureaucracy itself can’t be trusted to tell the truth when it is rewarded for spending more money.

Fire is a perfect example. For years, the Forest Service told Congress it could scientifically manage the national forests if Congress gave it millions of dollars, and then hundreds of millions, for fire suppression. Now the Forest Service admits fire suppression was an unqualified failure—so Congress rewards it for that mistake by giving it billions more.

Decentralization benefits

If the fuel story is only a myth, why do so many groups believe it? The answer is that it fits their agendas.

The Forest Service, of course, uses the fuel build-up myth to get a bigger budget. Commodity interests use it to cast blame on environmentalists for stopping timber sales that could have removed some of the fuel. Environmentalists use it to cast blame on timber cutters who leave fuels behind.

In the timber debate, both sides are a little bit right but mainly wrong: The real problem is not the timber program or lack of one, but the overall incentives facing federal land managers.

The incentives can be, and must be, fixed. One approach can save money, but won’t solve the problem of a centralized bureaucracy. The other focuses on decentralization.

• The centralized solution requires Congress to stop throwing money at the federal land agencies. Some of that money could be redirected to helping owners of private land in the wildland-urban interface fireproof their structures. The rest of the fire-related funding should dry up, and Congress should instruct the federal agencies to “Let the fires burn.”

In a few years, most forests would experience fires at rates not too different from the rates they experienced a hundred or so years ago. This approach will save billions of dollars, but letting all fires burn might not be the best ecological answer.

• The decentralized solution is for Congress to turn forests into self-funding units. The managers of each unit would have to decide, based on available revenues, how much fire protection they could afford. Some forest managers might let most fires burn. Others would put out some fires and would rely on insurance for the worst fire years. Congress could create appropriate safeguards, such as dedicating a share of forest revenues to non-market purposes, to make sure those resources are protected. Such safeguards don’t exist today.

Because it will fit solutions to the land rather than to whatever myth happens to hold Congress in its grip at the moment, decentralization will protect the environment better than any centralized process. Some timber will be cut, but without government subsidies less timber will be cut than in the past. Recreation fees will go up, but the people paying those fees will know they are giving managers incentives to protect the things they value.

Environmentalists and commodity interests should stop bickering and work together to end a century of mismanagement by misincentives. Only then will the national forests be truly managed for the people, and not just for the bureaucracy that is supposed to protect them.

Randal O’Toole (rot@ti.org) is senior economist with the Thoreau Institute (www.ti.org) and author of Reforming the Forest Service.

For more information

O’Toole’s Reforming the Forest Service is available through Amazon.com. Point your browser to http://www.amazon.com/exec/obidos/ASIN/0933280459/theheartlandinst.