Wildfire Risk Management on a Landscape with Public and Private Ownership: Who Pays for Protection?

Abstract

Wildfire, like many natural hazards, affects large landscapes with many landowners and the risk individual owners face depends on both individual and collective protective actions. In this study, we develop a spatially explicit game theoretic model to examine the strategic interaction between landowners’ hazard mitigation decisions on a landscape with public and private ownership. We find that in areas where ownership is mixed, the private landowner performs too little fuel treatment as they “free ride”—capture benefits without incurring the costs—on public protection, while areas with public land only are under-protected. Our central result is that this pattern of fuel treatment comes at a cost to society because public resources focus in areas with mixed ownership, where local residents capture the benefits, and are not available for publicly managed land areas that create benefits for society at large. We also find that policies that encourage public expenditures in areas with mixed ownership, such as the Healthy Forest Restoration Act of 2003 and public liability for private values, subsidize the residents who choose to locate in the high-risk areas at the cost of lost natural resource benefits for others.

Appendix 1

Equilibrium Outcomes when Public is not Budget Constrained

When Public is not budget constrained, the landowners’ response functions are parallel. Without a budget constraint, Public has sufficient funding for fuel treatment in both areas and no longer has to tradeoff between fuel treatment effort within and outside the WUI. When the Public and Private WUI values are equal ($\hbox{PG}_{\rm w}^{\rm g} + {{\phi }}({v} + {A}) = (1 - {{\phi }})({v} + {A})$), the two response functions overlap and there are infinitely many NE (Fig. 10). Because the landowners have the same amount of value at risk in the WUI, each landowner values improvements in WUI fire resilience equally.

Fig. 10

Overlapping best response functions

In the case where the Public and Private WUI values are not equal, there are two possible equilibria, illustrated in Fig. 11a and b. Relative values in the WUI will determine which of the extreme free riding equilibria emerges. If Private values are greater than Public values in the WUI, then Private will contribute effort equal to ((1 − ϕ)(v + A)/c) and Public will contribute nothing. If the opposite is true, then Public will contribute effort equal to $({\text{PG}}_{\rm w}^{\rm g} + {\phi}({v} + {A}))/{c}$ in the WUI and Private will contribute nothing. At both equilibria, Public spends the efficient level of effort outside the WUI.

Fig. 11

a Private WUI values greater; b public WUI values