Montana and Lone Mountain Fellowship

Abstract

Climate change has been shown to increase wildfire risk, while prescribed burning is a potential management action that landowners can perform to adapt to such climate-driven changes in risk. Our study builds off natural resource economic theory to illustrate how wildfire is jointly determined with optimal prescribed burning decisions by landowners. We then use panel data on prescribed burning permits across the southeastern U.S. states to empirically estimate i) how climate and previous wildfire events affect prescribed burn decisions and ii) how climate and prescribed burning affect wildfire extent and ignition. Based on a fixed effect – instrumental variables identification strategy, our estimated simultaneous system finds that climate changes that lead to hotter and drier conditions will increase the use of prescribed burning, with landowner adaptation to corresponding wildfire risk being a key driver of increases in prescribed burning. Further, we find that a hotter and drier future climate will increase wildfires, though some of the increase in wildfires will be mitigated by landowners performing more prescribed burning in response to the increased risk. Our findings also indicate that policies that increase regulatory costs of prescribed burning have a strong negative impact on prescribed burning acreage. This paper provides intuition and quantitative evidence regarding the interaction between climate, wildfire, and landowner management adaptation.