Adapting to Increased Fire Risk in the West
The LA Times features two really good opinion pieces today about environmental issues. One is by my colleague Glen MacDonald and the other is by Alyson Kenward. Glen’s piece provides new empirical evidence challenging the climate skeptics while Alyson Kenward discusses elevated fire risk in the American West.
Kenward’s piece isn’t long enough to discuss the “human dimension”. How do we set up the rules of the game to adapt to this new fire risk? Permit me to sketch a solution that blends land zoning and free market techniques. Suppose the climate scientists have provide credible spatial maps concerning which areas face elevated fire risk. A logical person might draw a map around such danger zones and make this information public. The immediate effect of this updated disclosure is that home prices will fall in fire zones due to the risk exposure. For incumbent home owners, does the Coase theorem apply? Should the state incentivize them to sell their home to the state who then would demolish it to create a buffer zone between the fire risk area and the population centers?
To dissuade more people from moving close to the fire zone, should zoning laws be made stricter to control the quantity of new permits? Or only consider issuing permits if the new home is built out of materials that face less fire risk? Insurance companies should be allowed to price discriminate in such fire zones so that one must pay a much higher fire insurance premium and this price is only lower if one uses building materials and landscapes in ways to reduce fire risk. For those caught setting fires in these forests, we could try some Singapore style punishments. While perhaps extreme, this would deter malfeasance.
It is an empirical question to measure how useful would each of these strategies be in reducing deaths and property destruction caused by wildfires but I believe that this small set of actions would greatly help. Can each of these strategies (ignoring my Singapore sympathy) be implemented? If your answer is no, then I think that environmental lawyers should be working on that topic.
UPDATE: I see that Howard Jarvis doesn’t agree with me.
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About Matthew
Matthew E. Kahn is a Professor at the UCLA Institute of the Environment, the Department of Economics, and the Department of Public Policy. He is a research associate at t…
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“The immediate effect of this updated disclosure is that home prices will fall in fire zones due to the risk exposure. For incumbent home owners, does the Coase theorem apply? ”
As most of these are second homes and less likely to be a tradable commodity, this is less likely to be a motivator to sell and move.
“The immediate effect of this updated disclosure is that home prices will fall in fire zones due to the risk exposure. For incumbent home owners, does the Coase theorem apply? ”
As most of these are second homes and less likely to be a tradable commodity, this is less likely to be a motivator to sell and move.