Academic journal article Texas Law Review

A Baptism by Incentives: Curing Wildfire Law at the Font of Oil and Gas Regulation *

Academic journal article Texas Law Review

A Baptism by Incentives: Curing Wildfire Law at the Font of Oil and Gas Regulation *

Article excerpt

For over sixty years, wildland fires in the United States have been consuming American land to an ever-increasing extent:1 from January 1 through March 31 of 2017 alone, over two million acres of U.S. earth were scorched by wildfires.2 According to the U.S. Environmental Protection Agency, nine out of the ten years with the highest burned acreage counts on record in the United States have occurred within the past seventeen years.3

The cost of residential property destruction, both in terms of quantity and in terms of value, is one significant marker of just the human costs of wildfires. From 2002 to 2011, insured losses4 related to wildfire totaled $7.9 billion, up 364.7% from the previous decade's total insured losses.5 On at least one rendering, annual American property loss due to wildfire has been estimated to have increased by more than 22,000% between 1960 and the early 2000s.6 As global temperatures increase,7 the costs of wildfires in terms of property damage are only likely to balloon in tandem.8 Moreover, Americans continue to expand into the Wildland-Urban Interface (WUI),9 an area defined as the "zone where natural areas and development meet."10 At least with respect to certain " megafires"-enormous wildfires that consume over 100,000 acres11-property damage costs, stated in terms of insured losses,12 are significantly greater than fire-suppression costs.13 On top of property damage, wildfires destroy large swaths of habitat acreage and claim the lives of countless animals.14

Aside from the destruction of monumental amounts of land, property, and lives, wildland-fire-suppression efforts are exceedingly expensive. At the federal level, annual wildfire-suppression costs have topped $1 billion in thirteen out of the past sixteen years.15 At the state level, in 2014-the most recent year for which comprehensive statistics on state fire-suppression efforts are available-state forestry agencies across the United States collectively spent $1.98 billion on wildland fire programs.16 At the local level, municipal governments generally enact local ordinances based on the model codes adopted by their states; these ordinances are not typically written up as formal statutes.17 To further fuel the wildfire problem, firesuppression efforts appear to be at best tainted by inefficiency,18 and at worst may be the product of distilled self-interest.19

On top of cost and human error, the fragmented ownership of firesheds gives rise to the deeper error of the collective-action problem.20 Given the relatively small financial status of each homeowner in the WUI, homeowners gain little value from bargaining with either industrial landowners or other homeowners.21 In short, the "heterogeneous preferences" present throughout the WUI lead to a world in which contracting for wildfire-risk reduction is limited.22

Published authors and academics in the realm of domestic wildfire policy mince no words. Some authors have decried widespread American fire-suppression tactics as ineffective at decreasing wildfire severity;23 others have criticized the U.S. federal wildland firefighting complex as "rife with incentive problems."24

One primary flaw with modern wildfire law and policy in the United States is the fact that neither recognizes the nature of firesheds as commons.25 Firesheds are defined as "areas of similar wildfire threat where a similar response strategy could influence the wildfire outcome," and are "conceptually analogous to watersheds"26-natural catchments that drain water to a common source.27 At the time of this writing, state and federal lawmakers have done little to address wildfires in the United States as a general proposition,28 much less put forth any serious effort to generate an effective policy in the fireshed: one that sophisticates current wildfire risk reduction efforts ex ante and evolves along with relevant science and knowledge on the subject of wildfires.

This Note argues in favor of state enactment of statutory schema that would allow private landowners to "pool"29 and "unitize"30 their interests in risk-reductive land management. …

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