Modelling the benefits of bushfire management

Making better bushfire management decisions requires an understanding of the relative benefits of mitigation options. Benefits, in terms of reduced risk and damages, include direct benefits to life and property but also important social, environmental and economic benefits.

Aither has been working with the Victorian Department of Environment, Land, Water and Planning (DELWP) to develop a pilot economic model capable of quantifying these benefits.

Population growth and climate change are key contributors to greater bushfire risk. State-based agencies like DELWP must make significant investment decisions to combat the environmental, social and economic costs of bushfires. These decisions include land-use changes, infrastructure development and planning and enhancing community resilience and recovery. However, their current decision-making tools are limited.

Current bushfire models are adept at simulating fire spread and the amounts of land and property burnt under scenarios featuring different management options. Yet, they do not assess and compare the costs and benefits of different management options. This can lead to suboptimal investment decisions, and provides limited evidence to clearly communicate and justify the value of past and future bushfire management actions.

The economic model addresses these limitations by delivering a robust and quantified analysis of the benefits and costs of risk reduction measures. The model integrates physical fire simulations with spatial estimates of economic values to predict different benefits of risk reduction. This includes benefits of protecting physical assets such as buildings and agriculture and environmental and social benefits, which are traditionally harder to value. The extent of the model enables users to assess a range of risk-reduction measures of different size and scope across all of Victoria.

Estimating the benefits of risk reduction options through this economic model can lead to:

• better bushfire risk management and investment decisions (resulting in lower government expenditure and greater benefits to communities from avoided bushfire costs)
• an improved ability to justify investments and secure future funding, particularly for management approaches with significant social or environmental benefits
• more effective communication of the rationale for specific management actions to decision-makers and the community.

The continued development of physical bushfire models has led to a high standard of available state-wide spatial data for different assets. Yet, quantifying the economic, environmental and social values at risk has been less of a focus. To address this information gap, we have developed a comprehensive set of values based on our expertise in economic analysis and valuation. This includes transferring existing estimates from the literature, such as the value of ecosystem services provided by forests, tourism activity and agricultural production and physical assets.

We developed our model through close collaboration with decision-makers and technical experts at DELWP. This has fostered a shared understanding of how the economic model works and has built confidence in using the model and interpreting the results.

We have worked closely with DELWP’s modelling team to integrate the economic model with physical fire simulation modelling (undertaken with Phoenix RapidFire). This integration provides a repeatable tool that quickly assesses a broad range of management actions. The model can also be integrated with other fire simulation models, including Spark (developed by CSIRO).

We applied the model to specific management actions undertaken as part of DELWP’s Reducing Bushfire Risk program, demonstrating that the investments delivered net benefits to Victoria, including significant ecosystem services and tourism benefits. DELWP has already started using the model to show the value of other past investments, support the development of a business case and more effectively plan and prioritise future bushfire management investments.

The economic framework underpinning the model can be easily transferred for use in other jurisdictions. With extension, the model could quantify a larger range of benefits and support decision making in other contexts, including on-ground resource allocation.