Toward full economic valuation of forest fuels-reduction treatments

A cost-benefit analysis of WildFireSat, a wildfire monitoring satellite mission for Canada

In anticipation of growing wildfire management challenges, the Canadian government is investing in WildFireSat, an Earth observation satellite mission designed to collect data in support of Canadian wildfire management. Although costs of the mission can be reasonably estimated, the benefits of such an investment are unknown. Here we forecast the possible benefits of WildFireSat via an avoided cost approach. We consider five socio-economic components: suppression costs (fixed and variable), timber losses, property, asset and infrastructure losses, evacuation costs, and smoke related health costs. Using a Monte Carlo analysis, we evaluated a range of possible changes to these components based on expert opinions. The resulting Net Present Value (NPV) estimates depend on the presumed impact of using WildFireSat decision support data products, with pessimistic and conservative assumptions generating mission costs that typically exceed potential benefits by 1.16 to 1.59 times, while more optimistic assumptions generate benefits in excess of costs by 8.72 to 10.48 times. The analysis here excludes some possibly significant market and non-market impacts expected from WildFireSat due to data limitations; accounting for these additional impacts would likely generate positive NPVs under even cautious impact assumptions.

Forest Bio-Hubs to Enhance Forest Health While Supporting the Emerging Bioeconomy—A Comparison between Three U.S. Regions

The emerging bioeconomy requires new supply chain paradigms for biomass materials to reach processing centers. Forest bio-hubs can be thought of as networks of collection points to facilitate biomass supply chains that feed from forest to central processing facilities. The design and functionality of forest bio-hubs depends on the form (e.g., vertically and horizontally integrated), and the quality and volume of feedstocks. In this paper we conceptually develop the potential role of forest bio-hubs. We then compare current bio-hub development in three U.S. regions—the Pacific Northwest, the southwest region, and the southeastern U.S. We use a “SWOT” framework to compare strengths, weaknesses, opportunities, and threats for each region. We consider transportation distances, topography, proximity to markets, harvesting methods, and wood products development. Innovation and adaptability would play key roles in forest bio-hub development, especially with dynamic conditions related to markets, wildfire risks, biomass utilization policy, and community socioeconomic factors.

Comprehensive comparative economic evaluation of woody biomass energy from silvicultural fuel treatments

Fuel treatments are used in overstocked, fire-prone forests to alter wildfire behavior and reduce fire risk. Some of the benefits they provide are not captured in markets, and therefore represent unaccounted environmental externalities that can lead to inefficient decision making. This study uses a replicable method to integrate market and nonmarket economic values into a comprehensive economic evaluation of fuel treatment and bioenergy production using a case study of ponderosa pine and mixed-conifer forests in Colorado's wildland-urban interface. Treatment costs and people's willingness to pay for better forest health, lower likelihood of wildfire, improved air quality, and expanded renewable energy production are incorporated into techno-economic analysis of biopower production. Results show that fuel treatments are likely to be undervalued when evaluated strictly on a financial basis. Under the standard practice of disposing of treatment residues through pile-burning, net present value (NPV) of fuel treatment on 138,034 ha over 20 years is -$275 million, without consideration of nonmarket benefits. If nonmarket benefits associated with forest health, wildfire likelihood and air quality are included, NPV improves to -$116 million. Without the consideration of nonmarket benefits, when treatment resides are used for biopower production, NPV is -$178 million, with net cost savings compared to pile burning attributable to reduced biomass disposal costs and electricity revenue. Accounting for additional air quality benefits and nonmarket value associated with renewable energy, the bioenergy scenario improves NPV to -$25 million, with 27.7% of outcomes having positive NPV. The impact of additional nonmarket values and potential revenues from timber harvest are discussed, and are likely to make mean NPV positive for this scenario.