Financing Wildfire Resilience in Colorado
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Framework for Conducting TBL-Based Analysis
Conducting an economic assessment of wildfire risk resilience strategies requires an understanding of the probability of wildfire events under various conditions, as well as expected levels of severity, and oftentimes, rainfall conditions following a fire event. The benefits of wildfire resilience projects vary by intervention type, scale of application, and other site specific conditions. Benefits also depend on whether the intervention is designed to reduce the probability and/or severity of wildfire (e.g., forest thinning and prescribed burns) or to reduce the impacts of wildfire once it occurs (e.g., interventions such as aerial mulching, stream restoration). Many of the benefits from interventions designed to reduce wildfire probability and./or severity are considered “no regrets” actions because they provide benefits for years in which no fires occur (e.g., forest management interventions can increase surface water flow volume and improve habitat quality).
Click through the sections below to navigate these complexities. Each section describes key steps and considerations for conducting a TBL-based economic analysis of wildfire resilience strategies, establishing a framework that water utilities and their partners can use to better understand and assess the full range of associated benefits.
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Establishing a Baseline
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
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Identifying a Project & Outcome Scenario
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
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Quantifying & Monetizing Benefits
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
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Qualitative Benefits
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
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Comparing Benefits & Costs Over Time
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
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Understanding & Documenting Uncertainty
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
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Avoiding Double Counting
The first step to valuing a benefit is to establish the physical quantities or outcomes associated with it. For wildfire resilience projects, these may include for example, tons of sediment transport avoided, pounds of air pollutants avoided, or the number of recreational user outings enabled by enhanced instream flows or water quality. These metrics serve as the initial step in the valuation process; it is therefore important to match the quantity units of measurement to whatever metric is available for the corresponding dollar values. Once the physical benefits have been estimated, a per unit dollar value often can be assigned to the benefit to reach a total value (quantity times per unit value). Monetary values can be estimated by applying the economic valuation methods described previously.
The table below presents common quantitative outcomes and economic analysis methods that can be used to value the benefits associated with wildfire resilience projects. While many can be valued using original studies, these benefits can also generally be estimated using benefits transfer techniques. For both physical outcomes and monetized benefits, ranges may be used (rather than a single point estimate) to better represent variability or uncertainty in the estimates. These outcomes should be evaluated under various assumptions related to fire severity.
In quantifying the value of fire resilience projects, it is important to account for the inherent uncertainty associated with wildfire risk. Specifically, the benefits of wildfire resilience projects are a function of burn probability, fire severity under pre- and post-project conditions (which in turn is a function of weather conditions, topography, point of ignition, and other factors, note that this only applies to strategies intended to reduce wildfire risk), and expected post fire outcomes with the planned interventions. Changes in assumptions related to these parameters provides for a reasonable range of benefit estimates. Click below to read a case study of how these factors were accounted for in a 2021 study that estimated the net economic benefits of Denver Water’s investments in proactive wildfire mitigation and source water protection under its Forests to Faucets (F2F) initiative.
Case Study – Denver Water
Wildfire Risk Assessment Assumptions for Economic Analysis of Denver Water’s From Forests to Faucets (F2F) Wildfire Resilience Partnership
In 2019 Jones et al. (published by the Colorado Forest Restoration Institute) estimated the net economic benefits of Denver Water’s F2F Partnership. Through F2F, partners implement and monitor a series of wildfire risk reduction projects, including forest restoration, biomass removal, and prescribed burning, in areas of high priority for source water protection. To date, F2F partners have treated over 120,000 acres within forested areas that supply water to Denver Water.
Because the primary objective of the F2F treatments was to reduce fire severity, the authors decided to hold the probability of wildfire occurrence constant across baseline (pre-treatment) and post-treatment conditions. While this may underestimate the benefits of the treatments, previous studies have shown that the effect of wildfire risk reduction strategies on the likelihood of fire occurrence is relatively small at the landscape scale.
Jones et al. estimated burn probability across the study area using Large Fire Simulator (FSim). This allowed them to estimate the likelihood of treatments encountering wildfire over their effective lifespan (assumed to be 25 years). The authors assumed two wildfire occurrence scenarios to calculate benefits. The first scenario calculates the benefits of wildfire mitigation treatments assuming treated acres are burned once during the 25-year time frame (conditional occurrence). The second calculates expected benefits based on the modeled probability of the wildfire mitigation treatments encountering wildfire, which varies across the landscape (expected occurrence).
To model fire behavior with and without treatments, the authors used FlamMap 5.0, which spatially predicts fire attributes under different conditions. The authors relied on surface and canopy fuels data from LANDFIRE (2014) to model fire behavior under baseline conditions. Surface fuels are represented by categorical fire behavior fuel models (FBFMs), which characterize common fuel loading and arrangements and their associated flame lengths and rates of spread. Canopy fuels are described in terms of canopy base height, canopy height, canopy bulk density, and canopy cover. To assess post-treatment fire behavior, the authors reclassified surface fuels into new FBFMs and modified the canopy fuel assumptions by treatment type with proportional adjustment factors (reflective of post-treatment conditions).
The authors also estimated treatment effects under two fire behavior scenarios. The first scenario relies on modeled changes to wildfire severity based on changes to canopy and surface fuels and the resulting fire behavior predictions. The second scenario assumes wildfire severity is lowered one level in the treated areas, unless already at low severity. For example, high severity wildfire changes to moderate severity and moderate severity to low severity. The second scenario gives the forest manager the benefit of the doubt that an appropriate treatment to mitigate crown fire hazard was prescribed.
The range of scenarios examined yielded four sets of results based on combinations of assumptions related to burn probability (conditional vs expected fire occurrence) and wildfire behavior following the planned treatments (modeled vs. assumed effectiveness). These assumptions were applied across benefit categories, providing “bookends” to the expected range of total benefits.
Source: Jones, K., Chamberlain, L., Gannon, B., and Wolk, B. 2021. A Cost-Benefit Analysis of Denver’s Forests to Faucets Program, 2011-2019. CFRI-2102.
How to Value Co-Benefits
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Triple Bottom Line Economic AnalysisTriple Bottom Line Economic Analysis
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Economic Valuation ApproachesEconomic Valuation Approaches
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Individual Resilience Benefits & How to Measure ThemIndividual Resilience Benefits & How to Measure Them
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Individual Resilience Benefits & How to Measure Them
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