Incorporating Non-Market Values in Fire Management Planning

The increased importance of non-market values in land management planning means that fire management and planning needs to more directly and effectively incorporate them into the planning and decision-making process. This means developing better understanding of the role of non-market valuation in the context of fire effects in prevention and suppression. It also means better knowledge and systems for including fire effects on non-market values and how they affect optimal fire management decisions. Non-market and especially non-use values can be incorporated into the cost plus net value change (C+NVC) framework for use with current land management planning systems. An innovative coupling of the C+NVC framework with cost effectiveness analysis (CEA) is introduced. Introduction Two economically-based decision frameworks are of particular relevance to fire management programs and budgeting. These are benefit cost analysis (BCA) and cost effectiveness analysis (CEA). CEA is a sub-set of BCA and is used where benefits are particularly difficult to quantify for comparison with cost. CEA has particular relevance to the treatment of non-market or non-use values in fire management. Each of these frameworks is explained below, including their relevance to the fire management situation. To determine if a particular fire management action represents an improvement in social well being, one must be able to measure the net gain in benefits. Benefits of market goods are more straightforward. But many resources occurring on public lands are non-marketed. As shown here, the benefits of these non-market resources can also be measured in dollar terms. All of these benefits plus the cost savings to society from fire prevention policies such as prescribed burns can be added together. These benefits can only be added together if all resources, market and non-market, are measured with a consistent valuation framework and accounting stance. This paper reviews current approaches to valuing and incorporating nonmarket values into fire management research and suggests an innovative approach to the treatment of non-market values that may be difficult or infeasible to quantify. Benefit-Cost Analysis (BCA) Benefit cost analysis is the practice of comparing the gains and losses of a particular activity or project with the purpose of aiding social decision-making. BCA can be performed ex ante or ex post (Boardman and others 1996). Ex ante BCA is used as a planning and evaluation tool where the analysis is performed before the project is undertaken to aid in the evaluation of alternatives including project scale. Ex post BCA is performed after the project is completed so that actual costs and benefits (as opposed to projected) can be compared. Each has relative advantages. Ex ante analysis is most often applied in fire management. An abbreviated version of this paper was presented at the Symposium on Fire Economics, Policy, and Planning: Bottom Lines, April 5-9, San Diego, California. Professors, Department of Forest Sciences, Colorado State University, Ft. Collins, CO 80523.e-mail: [email protected] Professor, Department of Agri­ culture and Resource Econom­ ics, Colorado State University, Ft. Collins, CO 80523. e-mail: [email protected] USDA Forest Service Gen. Tech. Rep. PSW-GTR-173. 1999. 217 Session V Non-Market Values in Fire Management Planning---Rideout, Loomis, Omi