[Senate Hearing 118-11]
[From the U.S. Government Publishing Office]


                                                        S. Hrg. 118-11

                  A BURNING ISSUE: THE ECONOMIC COSTS 
                              OF WILDFIRES

=======================================================================

                                HEARING

                              BEFORE THE

                        COMMITTEE ON THE BUDGET
                          UNITED STATES SENATE

                    ONE HUNDRED EIGHTEENTH CONGRESS

                             FIRST SESSION

                               __________

                             March 8, 2023

                               __________

           Printed for the use of the Committee on the Budget
           
[GRAPHIC NOT AVAILABLE IN TIFF FORMAT]          

                            www.govinfo.gov
                            
                                __________

                                
                    U.S. GOVERNMENT PUBLISHING OFFICE                    
52-110                      WASHINGTON : 2023                    
          
-----------------------------------------------------------------------------------     
                           
                        COMMITTEE ON THE BUDGET

               SHELDON WHITEHOUSE, Rhode Island, Chairman
PATTY MURRAY, Washington             CHARLES E. GRASSLEY, Iowa
RON WYDEN, Oregon                    MIKE CRAPO, Idaho
DEBBIE STABENOW, Michigan            LINDSEY O. GRAHAM, South Carolina
BERNARD SANDERS, Vermont             RON JOHNSON, Wisconsin
MARK R. WARNER, Virginia             MITT ROMNEY, Utah
JEFF MERKLEY, Oregon                 ROGER MARSHALL, Kansas
TIM KAINE, Virginia                  MIKE BRAUN, Indiana
CHRIS VAN HOLLEN, Maryland           JOHN KENNEDY, Louisiana
BEN RAY LUJAN, New Mexico            RICK SCOTT, Florida
ALEX PADILLA, California             MIKE LEE, Utah

                   Dan Dudis, Majority Staff Director
        Kolan Davis, Republican Staff Director and Chief Counsel
                   Mallory B. Nersesian, Chief Clerk
                  Alexander C. Scioscia, Hearing Clerk
                           
                           C O N T E N T S

                              ----------                              

                        WEDNESDAY, MARCH 8, 2023
                        
                OPENING STATEMENTS BY COMMITTEE MEMBERS

                                                                   Page
Senator Sheldon Whitehouse, Chairman.............................     1
    Prepared Statement...........................................    34
Senator Charles E. Grassley, Ranking Member......................     3
    Prepared Statement...........................................    36

                    STATEMENTS BY COMMITTEE MEMBERS

Senator Alex Padilla.............................................     5
Senator Ben Ray Lujan............................................     6
Senator Mitt Romney..............................................    20
Senator Patty Murray.............................................    22
Senator Mike Braun...............................................    27
Senator Ron Wyden................................................    28

                               WITNESSES

The Honorable Veronica Serna, Mora County Commissioner, District 
  1 New Mexico...................................................     7
    Prepared Statement...........................................    38
Mr. David Burt, Founder and Chief Executive Officer, DeltaTerra 
  Capital........................................................     9
    Prepared Statement...........................................    41
Mr. Michael Wara, J.D., Ph.D., Director, Climate and Energy 
  Policy Program and Senior Research Scholar, Stanford Woods 
  Institute for the Environment..................................    11
    Prepared Statement...........................................    47
Dr. Morgan Varner, Director of Research and Senior Scientist, 
  Tall Timbers...................................................    13
    Prepared Statement...........................................    64
Mr. Nicolas Loris, Vice President of Public Policy, C3 Solutions.    14
    Prepared Statement...........................................    66

                                APPENDIX

Responses to post-hearing questions for the Record
    Hon. Serna...................................................    79
    Mr. Wara.....................................................    81
    Dr. Varner...................................................    83
Charts submitted by Chairman Sheldon Whitehouse..................    86
Statement submitted to the Record by Senator Mike Crapo..........    89

 
                  A BURNING ISSUE: THE ECONOMIC COSTS 
                              OF WILDFIRES

                              ----------                              


                        WEDNESDAY, MARCH 8, 2023

                                           Committee on the Budget,
                                                       U.S. Senate,
                                                    Washington, DC.
    The hearing was convened, pursuant to notice, at 10:00 
a.m., in the Dirksen Senate Office Building, Hon. Sheldon 
Whitehouse, Chairman of the Committee, presiding.
    Present: Senators Whitehouse, Murray, Wyden, Lujan, 
Padilla, Grassley, Romney, Braun, and R. Scott.
    Also present: Democratic staff: Dan Dudis, Majority Staff 
Director; Kara Allen, Senior Energy and Climate Advisor, Energy 
Lead.
    Republican staff: Matthew Giroux, Deputy Staff Director; 
Jordan Pakula, Professional Staff Member.
    Witnesses:
    The Honorable Veronica Serna, Mora County Commissioner, 
District 1 New Mexico
    David Burt, Founder and Chief Executive Officer DeltaTerra 
Capital
    Michael Wara, J.D., Ph.D., Director Climate and Energy 
Policy Program and Senior Research Scholar Stanford Woods 
Institute for the Environment
    Dr. Morgan Varner, Director of Research and Senior 
Scientist Tall Timbers
    Nicolas Loris, Vice President of Public Policy C3 Solutions

          OPENING STATEMENT OF CHAIRMAN WHITEHOUSE \1\
---------------------------------------------------------------------------

    \1\ Prepared statement of Chairman Whitehouse appears in the 
appendix on page 34.
---------------------------------------------------------------------------
    Chairman Whitehouse. The hearing will come to order. I'm 
going to make some opening remarks as is Ranking Member 
Grassley, and then we'll turn to witness introductions. Senator 
Padilla's here to introduce a witness, and I think we'll be 
joined by another colleague to make a witness introduction, and 
then we'll proceed with the witness statements, which I 
appreciate everyone will keep to five minutes.
    And your testimony will be made a part of the record. 
Ranking Member Grassley, and members welcome. Last week we 
examined the economic and budget consequences of sea level rise 
and ocean storms on our coastal communities, and in turn on the 
federal budget. Today we turn from coasts to upland and look at 
the economic and budgetary impact of wildfires, which are being 
made worse by climate change.
    Rhode Island is certainly not ground zero for wildfire 
risk, but many of our committee members, and millions of 
Americans are at ground zero. Wildfires happen as far east as 
the Carolinas and Florida, and our west coast has been hammered 
by them. Wildfires can be natural, but their recent frequency 
and intensity is very unnatural, and threatens homes, 
communities, and emergency responders across great swaths of 
America.
    Nearly 50 million American homes are located in what's 
called the Wildland Urban Interface, where human habitation and 
forests converge. Every three years we add a million more homes 
in these areas. Today, 71 million properties out of 143 million 
are at risk of wildfire.
    You heard that right. Fully half of all properties in this 
country are at risk. In addition to direct fire damage, debris 
from fires can damage local watersheds and water facilities, 
and wildfire smoke plumes reach far outside the wildfire's 
destruction zone.
    Rhode Island sometimes has snow days for school aged 
children. Elsewhere, kids now regularly experience smoke days. 
And then there's the carbon emissions. California's 2020 
wildfire season may have undone two decades of the state's 
emission reductions.
    This illustrates the danger of climate feedback loops that 
can spiral out of control. The more climate upheaval, more 
wildfires. More wildfires, more carbon emissions. More carbon 
emissions, more climate upheaval. Mora County, New Mexico last 
year was consumed by the state's largest ever wildfire.
    The wildfire was in fact two wildfires combined. The blaze 
generated 30,000 foot pyrocumulus clouds that are capable of 
generating their own weather. The fire raged for four months, 
required more than 2,000 firefighters, burned over 300,000 
acres, and destroyed more than 900 structures before finally 
being contained.
    The area was also struck by intense rainfall, and the bone 
dry soil was unable to soak it up, so floods drove debris into 
local watersheds, damaging the region's water supply. Residents 
are still grappling with water scarcity. Between 2017 and 2021, 
the number of U.S. acres burned by wildfires averaged 8 
million. That's the size of Maryland.
    Thirty years earlier, from 1987 to 1991, the annual average 
was half of that. The principle factors contributing to the 
growth of wildfires are climate change, expansion of the 
wildland urban interface, and forest management practices. 
According to the First Street Foundation, climate change drove 
nearly half of the growth in wildlife risk exposure since 1985.
    First Street finds that estimated wildfire damages this 
decade could exceed $140 billion almost six times the average 
in the 1980's. One of our witnesses estimates that the wildfire 
insurance cost gap is over $8 billion today, and premiums may 
need to be 186 percent higher for high risk homes. Who will be 
on the hook for those increasing costs?
    We heard last week about the danger of a national coastal 
property values crash, as coastal homes could come uninsurable, 
and therefore un-mortgageable, so values plummet. A similar 
dynamic can transpire around wildfire risk. If you can't insure 
your house then the next buyer can't get a mortgage on it.
    In a world where one can only sell to all cash buyers 
property values collapse. The federal government budget is 
usually hit after a disaster strikes through emergency and 
disaster relief programs. The federal government also handles 
fire prevention on nearly 600 million acres managed by the 
Forest Service and the Interior Department.
    Wildfire management appropriations, he said as the Chairman 
of the Appropriations Committee joined us, for those agencies 
doubled from fiscal year 2011 to 2020 and that doubling was not 
enough. Supplemental appropriations were needed in seven of 
those ten years. The federal government then spends more after 
wildfires on agricultural assistance and healthcare due to air 
pollution exposure, and loses federal timber and sale revenues.
    All told, wildfires in seasons and areas much increased by 
climate change, are just one more way in which the many costs 
of fossil fuel emissions hit our federal budget. To my 
Republican friends concerned about debt and deficits, please 
join me in finding ways to reduce planet warming planet 
pollution at home and abroad.
    The steadily increasing toll of climate costs on our 
budget, and the looming prospect of a systemic economic failure 
is perhaps worse than the 2008 mortgage meltdown, make 
addressing carbon pollution the only reasonable and prudent 
budgetary course. Ranking Member Grassley.

           OPENING STATEMENT OF SENATOR GRASSLEY \2\
---------------------------------------------------------------------------

    \2\ Prepared statement of Senator Grassley appears in the appendix 
on page 36.
---------------------------------------------------------------------------
    Senator Grassley. Thank you Mr. Chairman. The President 
tomorrow will submit a portion of his 2024 budget. Like his 
first two budgets this one is about a month late. When the 
President's budget is delayed that screws up the whole 
Congressional process of appropriations and budgeting.
    The delayed process postpones--in other words when 
appropriators and authorizers can commence hearings to review 
agency spending. It also delays the Finance Committee's review 
of whatever the budget contains in regard to tax law changes. 
In fairness of the President, Congress doesn't follow its own 
process.
    Last year Congress didn't adopt a budget, nor did the 
majority attempt to write one. Not one appropriation bill was 
reported out of committee, and Congress didn't complete 
appropriations until December 23, with an irresponsible way to 
go ahead spending nearly two trillion dollars.
    Adopting a budget was once considered an essential part of 
good governance. Now it's barely an afterthought. Between 1981 
and 2000 Congress adopted a budget every year but one. 
Individual appropriation bills were also regularly debated and 
amended on the Senate floor. We didn't sit around twiddling our 
thumbs until December.
    Since 2008 we've adopted a budget only eight times. 
Moreover, we've only debated one or more individual 
appropriation bills on the Senate floor five times. The 
American people deserve better from this legislating body. 
What's most concerning is that our budget and appropriate 
process has deteriorated, so has our fiscal outlook, where 
deficits average two and seven-tenths of our economy.
    Between 1974 and 2000 they've averaged four and eight-
tenths percent since 2001. And deficits only grow larger moving 
forward. According to CBO for the next ten years deficits will 
consistently exceed levels once reserved solely for periods of 
global war or recession.
    To top it all off, in six years our public debt will exceed 
106 percent of our economy, a level we've only previously 
exceeded one time, and that was at the end of World War II. 
Needless to say things must change.
    Unfortunately, President Biden and Senate leadership are 
uninterested in getting back to regular order, or addressing 
our dire fiscal outlook. I remember the days of the Senate when 
we would come in at 10 o'clock Monday morning, go home for the 
weekend about 4 o'clock on Friday.
    We had five days of legislative sessions. Now we quite 
regularly come in with one vote after 3 o'clock on Monday, work 
a full day Tuesday and Wednesday, part of the day Thursday, and 
you can't get much done when you're in session two and a half 
days a week, but that seems to be the way things are done.
    Maybe that ought to be considered if people want to get 
more things done in the United States Senate. In addition, 
President Biden has refused to engage Speaker McCarthy in 
negotiations to reduce our unsustainable debt and deficit. In 
the Senate we've been in session for two months, with the 
majority offering no legislative agenda.
    What's more, this light work schedule begs the question of 
what we'll have time to accomplish. This suggests both 
President and democratic leaderships are content with 
continuing to govern crisis to crisis. First up, the debt 
ceiling. Inevitably it will be put off until the last minute. 
That will allow them to use the threat as default as leverage 
to avoid reality of a grim fiscal outlook.
    Next comes passing appropriation bills in the final weeks 
of December, this time presenting members with the dilemma of 
either voting for a multi-trillion dollar spending bill that 
they haven't read, or causing a government shutdown. Neither is 
acceptable.
    It doesn't have to be this way. This and every other 
committee should do its part to help us avoid 11th hour 
brinkmanship. To kick off next week's hearing on the 
President's budget should be the first of many hearings focused 
on getting our fiscal affairs in place.
    But now, onto today's budget hearing and the wildfires. 
First, it's important to note that forest fires are a natural 
part of succession, and are essential to ecological health. In 
the early 1900's about four and two-tenths percent of the land 
worldwide burned every year.
    A century later this has dropped to around 3 percent. While 
wildfires have become less expansive, they average annual 
acreage burned by wildfires in this country has increased over 
the past 30 years.
    So we're here to find out why. Yes, changes in the climate 
are a part of the story, and there are more important factors 
as well. It's high time that we started listening to foresting 
experts on the root causes of current trends that we're 
experiencing. A 2018 study conducted by the U.S. Forest Service 
scientists found forest fuel load to be the single largest 
factor driving high severity fire in the west from 2002 to 
2015.
    Few accounted for 53 percent of the average relative 
influence. In comparison, climate change accounted for 14 
percent according to these scientists. Few understand the need 
for better forest management, more so than one of our people 
today, Dr. Morgan Varner. He's joining us virtually from 
Tallahassee. He dedicated his career to fire management.
    He's the one witness who actually managed forest. He 
currently works for Tall Timbers and conducting prescribed 
burns in Florida, and previously led a team in Washington 
State. I also look forward to hearing a perspective of Nick 
Loris, an economist, who will speak to the economic impact of 
wildfires and the regulatory hurdles impeding effective forest 
management. Thank you Mr. Chairman.
    Chairman Whitehouse. Thank you, Senator Grassley. We have 
five witnesses joining us today, including a witness from New 
Mexico, who will be introduced by Senator Lujan, and a witness 
from California who will be introduced by Senator Padilla. I 
want to thank both of the witnesses for making the effort to be 
here today.
    The first is Michael Wara from California. My friend, 
Senator Padilla will introduce him.

                  STATEMENT OF SENATOR PADILLA

    Senator Padilla. Thank you Chairman Whitehouse, and Ranking 
Member Grassley for allowing me to introduce one of our 
nation's leading experts on wildfire research and policy, Mr. 
Michael Wara. Michael is the Director of the Climate and Energy 
Policy Program at the Stanford Woods Institute for the 
Environment and a Senior Research Scholar at the Stanford Doerr 
School of Sustainability.
    His legal and policy research focuses on wildfires, climate 
mitigation, and energy innovation. He is a California native 
who has dedicated his career to solving some of the biggest 
environmental challenges of our time. Prior to joining the 
Woods Institute, Michael was an Associate Professor at Stanford 
Law School, and he served as Catastrophic Wildfire Cost and 
Recovery Commissioner under former California Governor Jerry 
Brown.
    Throughout this career Michael has served as an invaluable 
resource to policy makers at both the states and the federal 
levels. He has been an invaluable resource to my office, and I 
know he'll bring an inciteful, unbiased, science-based 
expertise to this committee hearing. He has also authored 
numerous publications on wildfire smoke impacts, emission 
reduction strategies, and wildfire resilience.
    So beyond his testimony today, I urge my colleagues to read 
some of his exceptional research, particularly in the area of 
smoke impacts. And on a more personal note, Michael and I share 
a strong commitment to addressing the climate crisis for our 
children, our children's generation and future generations. The 
climate crisis is our existential fight, and that includes 
responding to, and mitigating the effects of increasingly 
frequent and catastrophic wildfires.
    These mega wildfires have become an all too regular reality 
facing California, and frankly, the entire western United 
States. But through informed policy making and collaboration 
with experts like Michael, I know we can meet this crisis and 
protect communities and lives.
    I want to thank Chairman Whitehouse for holding this 
hearing and continuing the dialogue of how we can leverage the 
federal budget to respond to the climate crisis, increasingly 
frequent and catastrophic wildfires, and more. Thank you Mr. 
Chairman.
    Chairman Whitehouse. Thank you Senator Padilla. Next we 
have the Honorable Veronica Serna from New Mexico, and I would 
turn now to my friend Senator Lujan for her introduction.

                   STATEMENT OF SENATOR LUJAN

    Senator Lujan. Well thank you Chair Whitehouse, and good 
morning to you and to Mr. Grassley, our Ranking Member, and 
thank you both for having this important hearing today. I'm 
very honored and grateful to have the opportunity to introduce 
my good friend, and fellow New Mexican, Commissioner Veronica 
Serna.
    I've known Commissioner Serna for a long time, and I can 
tell you she's a dedicated and caring advocate for her 
community, and has had to become somewhat of an expert because 
of the largest fires in our state's history, one that was 
started as a controlled burn.
    It still gets me angry because someone missed this. I'll 
save that for the hearing. I apologize. Commissioner Serna 
brings with her today experiences from a small town, a 
beautiful community in Mora, New Mexico. One that's maybe even 
smaller than where I grew up in Nambe, New Mexico, and that 
says a lot right Commissioner?
    Her testimony will remind everyone that our New Mexico 
families out in the middle of high desert or situated in the 
forests and mountains up north are no different than the 
families who live in communities across the country. Our moms 
and dads also want good schools to send their kids too, 
restaurants and grocery stores to put food on the table, 
prevention measures and funding to help communities prevent and 
rebuild from natural disasters such as wildfires.
    These towns that Commissioner Serna and I are talking about 
deserve the same microphone and platform for addressing their 
issues as our nation's largest cities and biggest towns. When a 
once in a lifetime wildfire and flooding hits a small town like 
Mora, the consequences are devastating--not just emotionally, 
but also their impact on the community's budget and resources. 
And that's something we've seen since the Hermit's Peak Calf 
Canyon fire in New Mexico.
    I want to thank my colleagues for supporting an initiative 
last year to provide support recognizing the liability of the 
federal government in causing this fire, but we should also 
understand the dry conditions and the climate impacts where 
this fire burned not just tree after treetop, it burned on the 
ground.
    And some places where it would shoot under whatever was on 
the canopy of the ground that's supposed to hold moisture like 
a sponge, and it would shoot out somewhere else because it's so 
dry. These are new conditions unlike we've ever seen. Now the 
funding is critical to the community's survival, but it's only 
one piece of the recovery effort.
    Now Commissioner Serna is here to share with us what it 
felt like to live through the wildfires, the trauma that I know 
families and kids are still facing today. And she will share 
how the surrounding communities are still working to recover 
from this fire today. Mr. Chairman, I have much more to share 
about that with her--the introduction, but there is going to be 
no more compelling voice than Commissioner Serna's. Thank you 
for the time, and I look forward to hearing from all of you.
    Chairman Whitehouse. Thank you Senator Lujan for 
recommending this terrific witness. I appreciate it. Now our 
other witnesses are David Burt, who is the Founder and CEO of 
DeltaTerra Capital. DeltaTerra is an investment research firm 
focused on climate risk analysis for institutional investors. 
It has conducted analysis for its investors of the wildfire and 
flood risks to the single family housing market, and Mr. Burt 
was a legendary predictor of the housing market meltdown of 
2008.
    Dr. Morgan Varner is joining us remotely. The Director of 
Research for Tall Timbers, a land trust in South Georgia and 
North Florida, where Dr. Varner manages its research into fire 
science, rare species, and game bird management.
    Finally, we have Nicholas Loris, Vice President for public 
policy at the Conservative Coalition for Climate Solutions, C3 
Solutions otherwise known as. Before joining C3 Solutions he 
worked for the Heritage Foundation. Commissioner Serna, why 
don't we lead with you. You have five minutes for your remarks. 
Thank you for being here. We are grateful to have you in the 
Budget Committee.

      STATEMENT OF HONORABLE VERONICA SERNA, MORA COUNTY 
            COMMISSIONER, DISTRICT 1 NEW MEXICO \3\
---------------------------------------------------------------------------

    \3\ Prepared statement of Hon. Serna appears in the appendix on 
page 38.
---------------------------------------------------------------------------
    Honorable Serna. Good morning Chairman Whitehouse, Ranking 
Member Grassley, and distinguished members of the Committee. I 
want to thank you for giving me this opportunity to share our 
story.
    I am Veronica Serna, County Commissioner District 1 from 
Mora County, one of the poorest of 33 counties in New Mexico. 
We are situated in the remote Sangre de Cristo mountains of 
Northeastern New Mexico. We are approximately 150 miles away 
from the closet metropolitan city, Albuquerque, New Mexico. 
Mora County's population has been dwindling slowly over the 
last century to merely over 4,000.
    I'm going to read the rest of my statement as it is very 
important to our people that I do not leave anything out in the 
time I'm allowed. Mora County was struggling even before the 
disaster of the Hermits Peak Calf Canyon Fire. On April 22, 
2022, the wildfire crossed into Mora County at which time Mora 
County called for an emergency meeting to declare our state of 
emergency.
    By that afternoon evacuations began on the western end of 
the county and continued for several weeks. Within a few days, 
the fire reached the mountain that held all our communication 
towers, and torched them to a crisp, leaving us without a way 
to communicate with each other, and most seriously, with first 
responders, including firefighters, law enforcement and EMS.
    Mora County lost over 220 structures without about half of 
those being a primary resident. The rest were either secondary, 
seasonal homes, or miscellaneous structures. In our culture, 
many of our residents have lived in adobe homes that have been 
passed down through several generations. With no mortgage on 
most of these homes, consideration for homeowners' insurance 
has often been overlooked, deemed uninsurable, or simply 
unaffordable.
    Many of these people survived by raising livestock and 
harvesting beef and wild game every year to provide for their 
families. They fill multiple freezers with meat, chili, and 
other crops they harvest in the fall to provide food until the 
next season. All of this was lost due to the need for the 
electric company cutting the power supply off for safety--for 
safety reasons during the fire.
    More than half of the households in the county rely on 
firewood to heat their homes, with many still utilizing 
firewood for cooking. It will be many years, if not decades, 
before these mountains will provide trees large enough to 
supply adequate firewood for these homes again.
    The other issue we face is a supply of native seedlings to 
help reforest our mountains, as it is not adequate for just our 
mountains, let alone for the entire state and neighboring 
states that rely on the supply from the New Mexico State 
University J.T. Harrington Tree Farm in Mora.
    If the fire was not bad enough, on July 1, 2022, we were 
once again hit with another disaster when the monsoon season 
arrived along the burn scar, bringing multiple flooding events 
day after day after day, which continued until mid-September, 
requiring that people once again be evacuated as the flooding 
events threatened their safety.
    Today we still have residents displaced because of the 
damage that the flooding events caused to their homes, their 
wells, septic tanks and roadways. As a result of the flooding 
events four lives were lost.
    Approximately 29 county roads in Mora County were destroyed 
because of the multiple flooding events off of the burn scar. 
We are waiting on loans from the state to start reconstruction, 
so that people can once again get in and out of their 
communities safely, and without damaging their vehicles. 
However, those roads will need to be redesigned to mitigate 
damage from future flooding that we expect over the next few 
years.
    Another major issue we face due to the flooding events is 
that the acequias, which are century old irrigation ditches 
have filled with silt, ash and debris, which pretty much 
eradicated them, leaving no way for water to flow to deliver 
drinking water for livestock, nor water for irrigating fields 
downstream for crops, thereby leaving no hay harvesting for 
winter feeding.
    Many of the fields below the burn scar were also ruined. I 
hope you consider the immense loss, not only to the federal 
government, but to local government and the people in our 
communities as well. This disaster totally drained our 
community, not only financially, but emotionally and 
psychologically as well. Thank you.
    Chairman Whitehouse. Thank you Commissioner for that very 
important testimony. I appreciate it. We will turn now to Mr. 
Burt and head across the table.

 STATEMENT OF DAVID BURT, FOUNDER AND CHIEF EXECUTIVE OFFICER, 
                     DELTATERRA CAPITAL \4\
---------------------------------------------------------------------------

    \4\ Prepared statement of Mr. Burt appears in the appendix on page 
41.
---------------------------------------------------------------------------
    Mr. Burt. Thank you, and good morning Chairman Whitehouse.
    Chairman Whitehouse. Good morning sir.
    Mr. Burt. Ranking Member Grassley, and Members of the 
Senate Committee on the Budget. My name is Dave Burt. I'm the 
Chief Executive Officer of DeltaTerra Capital. By translating 
newly available scientific estimates of physical climate risk 
into actionable insights for investors, lenders and 
policymakers, DeltaTerra aims to accelerate an orderly 
transition to a climate resilient financial system and society.
    Thank you for the opportunity to share our wildfire risk 
insights with the committee. We applaud your attention to these 
matters and are humbled by the opportunity to contribute. Since 
I last spoke to Senators about mispricing risks in property and 
mortgage markets in March 2020, we've experienced seismic 
shifts in monetary policy, mortgage rates, consumer housing and 
work preferences, and asset prices.
    Many of these changes have served to further exacerbate 
insurance mispricing issues we've been researching, setting the 
stage for a difficult asset bubble workout in the years to 
come. In my written testimony I refer to a 2021 DeltaTerra 
analysis of climate risk in U.S. single family home markets, in 
which we identified 4.1 million homes and communities with high 
exposure to wildfire risk.
    For these communities, we modeled a base case scenario in 
which property markets start to price in insurance premium 
costs that cover damage estimates in the IPCC mid-case climate 
scenario of RCP 4.5. Most scientists agree that this is a 
somewhat optimistic scenario in which the global community 
works together to stop emissions growth by around 2040.
    Temperatures still continue to warm for decades after 
emissions stabilized however, and physical and economic damages 
from wildfires will continue to increase as well our analysis 
estimates. Homeowners in these risky communities have been 
paying about $1.5 billion a year, collectively, for wildfire 
protection as a portion of their standard homeowners insurance.
    Current climate condition wildfire damage expectations are 
$9.6 billion a year, suggesting a very large insurance gap. A 
market value correction of 20 percent on average, but with some 
communities suffering much steeper declines. This is in the 
rationalization. That results in $317 billion of total market 
value losses.
    This leads to a 5.6 percent default rate for agency loans 
in these communities, and 115,000 households losing their homes 
to foreclosure. The problems have grown since this analysis, 
and multiple data sources around insurance take up, and leading 
fundamental indicators are confirming the market dynamics we 
road mapped in this scenario.
    If a homeowner in California is denied insurance from 
private insurers, they can apply for insurance from the state's 
insurer of last resort, the California FAIR Plan. New FAIR 
policies jumped from 23,000 in 2018 to 74,000 in 2019, 
following two back to back years of large insurer losses.
    While California slowed the private insurance exodus in the 
state by issuing a series of one year moratoriums on non-
renewal. The increase in FAIR policies has continued. The 
number of last resort policies almost doubled from 2015 to 
2021, while traditional insurance policies only increased by 4 
percent. When a homeowner is forced to secure an insurance 
policy from the state insurer of last resort, the premium 
usually increases substantially.
    Millions of homeowners, and perspective home buyers are now 
facing this prospect, and the impact on buyer behavior is 
observable in high frequency market data. An analysis of asset 
level transaction data we found substantial underperformance in 
year over year sales growth for high wildfire risk properties, 
beginning in 2021, possibly around the time when the first 
California non-renewal moratorium started expiring.
    Deteriorating fundamental trends tend to lead asset value 
declines by a year or two, and we are just beginning to see 
these value declines. As depreciation accelerates for these 
riskier than anticipated homes, many households will become 
financially stretched, and unable to weather even modest 
economic volatility.
    As I noted earlier, our base case shows a default rate on 
agency mortgages of 5.6 percent, and 115,000 foreclosures. In 
the bear case scenarios where markets start to price in an IPCC 
downside scenario, the default rate grows to 11.7 percent and 
240,000 foreclosures.
    We look at the 125,000 additional foreclosures in this 
scenario, as one of the many real human costs of inaction. 
Please consider that all of these projections are from a 
repricing of wildfire risk alone, so before considering other 
major climate impacts like flooding, water scarcity and more 
intense storms.
    While some wealthy households have the resources to absorb 
higher insurance costs and home value declines, academic 
research suggests that low and moderate income households that 
lack these resources will be left with the largest challenges. 
This dynamic, along with concentration of the risk and specific 
geographies will likely lead to increasing reliance on federal 
assistance and large losses on federally guaranteed mortgage 
loans. Thank you for the consideration.
    Chairman Whitehouse. Thank you Mr. Burt. We'll turn now to 
Mr. Wara, and I will give Mr. Varner, who is with us remotely, 
a heads up that he will be next to make sure that we're 
properly keyed in electronically to him. Mr. Wara please 
proceed. Thank you for being here.

 STATEMENT OF MICHAEL WARA, J.D., PH.D. DIRECTOR, CLIMATE AND 
  ENERGY POLICY PROGRAM AND SENIOR RESEARCH SCHOLAR, STANFORD 
            WOODS INSTITUTE FOR THE ENVIRONMENT \5\
---------------------------------------------------------------------------

    \5\ Prepared statement of Mr. Wara appears in the appendix on page 
47.
---------------------------------------------------------------------------
    Mr. Wara. Thank you for having me. Chairman Whitehouse, 
Ranking Member Grassley, and members of the Senate Budget 
Committee, thank you for inviting me to testify today on the 
costs of wildfire to my home state, California, and to the 
broader west.
    The wildfire crisis confronting western states is the 
product of multiple policies over the past 150 years combined 
with the growing effects of climate change. We made decisions 
that raised the risks, but over the past 20 years climate 
change has supercharged those risks. And over the past decade 
these risks have materialized in the form of a previously 
unimaginable and costly catastrophes in both suburban and rural 
communities.
    We can do much better with our land management, development 
and fire management, but ultimately controlling costs to do 
wildfire will require also reducing greenhouse gas emissions, 
the underlying cause of climate change to zero, and removing 
substantial quantities of greenhouse gases from the atmosphere.
    The causes of the wildfire crisis are complex. Prior to 
Spanish and American Conquest, Native Americans actively 
stewarded the land on which they lived by burning it to create 
safer, more productive ecosystems for hunting, foraging and 
cultural activities. Removal of most Native Americans from 
California forests in the 19th Century, combined with the U.S. 
Forest Service Fire Suppression Policy in the 20th, gradually 
led to increasing risk.
    Commercial logging, also raised risk by systematically 
targeting large diameter old growth trees that were highly 
resistant to wildfire, and then replanting with even aged 
stands of small diameter trees, more susceptible to fire. All 
of these actions elevated wildfire risk, but they could still 
be managed given available resources.
    In addition, our assets exposed to risk grew substantially 
over the last century. This increase in exposure was due to the 
growth of development in the wild land urban interface. This 
rapid growth had two effects. It made more people and 
structures vulnerable to wildfire, and also caused more 
wildfires because people are the most important source of 
ignition.
    Added to this increasingly risky situation has been the 
transformative effect of climate change. Simply put, climate 
change is making the western atmosphere thirstier. Scientists 
identify the seasonal average vapor pressure deficient, the 
difference between the amount of moisture air can hold, as 
compared to what it actually does hold, as a key factor in 
increasing wildfire risk.
    A thirstier atmosphere means that trees and shrubs must 
evaporate more water through their leaves to stay healthy. That 
water evaporates from soils and lakes more readily, and that 
the overall forest dries out more than one would expect from 
temperature increase alone.
    Vapor pressure deficits expects to continue to increase 
over the coming years such that the average fire season of the 
2040's is likely to be similar to the worst fire season, the 
2020 season, that we have experienced today. Because of climate 
change, there's no real way to adapt our way out of this 
problem. In the end, wildfire will be a significant and lasting 
impact from climate change, not just in the west, but around 
the world.
    Stabilizing this situation requires both change to our land 
management and development patterns as well as meaningful 
reductions in emissions. The costs of the status quo are large 
and growing. If we fail to act we could be confident that a set 
of consequences will predictively follow. I'll just mention 
three in my oral testimony, but I detail a larger set in my 
written submission.
    First, structural losses will continue to accelerate 
threatening residential insurance markets, and through them, 
residential real estate markets. Over five years we've lost 
close to 40,000 homes in a state that's in the midst of a 
housing crisis. Such losses and consequences are 
disproportionately borne by our low-income residents.
    Second, ecosystem loss will accelerate. California's lost 
25 percent of giant sequoia groves over the past five years. A 
warmer, drier Sierra may not support regrowth of forest after 
high intensity fires, turning large stretches of the range from 
forested landscapes to brush fields. Fire threatens not just 
ecosystems, but also the services they provide, especially 
water supplies, a perennial challenge for the west.
    Third, air pollution impacts from wildfire will continue to 
undermine hard fought gains in western air quality. The air in 
the west has been getting worse since 2016, and this trend will 
continue, and potentially accelerate. The public health costs 
of wildfire air pollution are likely as high, if not higher, 
than the value of structural losses.
    Impacts are highest for seniors, kids, pregnant women, and 
people with asthma. These costs will grow as a share of 
Medicare and overall healthcare costs.
    In conclusion, the rule of thumb is that a dollar of risk 
mitigation prevents $6.00 of losses. As detailed in my written 
testimony, the payoffs to reducing wildfire risk are likely 
much higher than this. Lasting success requires not just major 
investments in short to medium term solutions, such as home 
hardening, community level protection, and reintroduction of 
fire, but also solving the problem of climate change.
    Otherwise, the wildfire problem is just going to get worse. 
Only by taking all of these steps, and solving for climate 
change can we avoid creating massive and growing costs for both 
the federal government and western states, including 
California. Thank you.
    Chairman Whitehouse. Thank you very much Mr. Wara, and 
thank you for bringing the phrase vapor pressure deficit into 
my vocabulary. That was not one I knew before I read your 
testimony. If Mr. Varner is available electronically, why don't 
we turn to him for his five minute statement.

STATEMENT OF DR. MORGAN VARNER, DIRECTOR OF RESEARCH AND SENIOR 
                  SCIENTIST AT TALL TIMBER \6\
---------------------------------------------------------------------------

    \6\ Prepared statement of Dr. Varner appears in the appendix on 
page 64.
---------------------------------------------------------------------------
    Dr. Varner. Thank you Chairman Whitehouse, Ranking Member 
Grassley, and Members of the Committee for the invitation to 
discuss the economic toll of extreme wildfires and the proven 
solutions to this crisis. My name is Morgan Varner, and I am 
the Director of Research and a Senior Scientist at Tall 
Timbers, a leading non-governmental organization with over 65 
years of experience studying fire's effects on plants and 
animals and using prescribed fire science to help solve land 
management problems.
    Tall Timbers is the birth place of fire ecology, the home 
to a national interagency prescribed burn training center, and 
a prominent land conservancy, and an international thought 
leader on prescribed fire and conservation. Prior to working at 
Tall Timbers, I was a professor of forestry for 12 years in the 
west and in the south. I was also a team leader and scientist 
for the USDA Forest Service at the Pacific Wildland Fire 
Sciences Lab in Seattle.
    The increasing intensity and frequency of disruptive 
wildfires that the Committee is considering today is alarming, 
and it is clearly a national crisis. The statistics are 
staggering. Since 2005 wildfires have burned over 10 million 
acres annually three times, and this alarming number is only 
increasing.
    Modern wildfires are not only burning larger areas, but are 
also much more harmful to human communities, to forest, and to 
the broader environment. In that same period nearly 100,000 
structures have burned in wildfires, and that staggering 
number, two-thirds of that has occurred since only 2017. Recent 
wildfires have killed a troubling fraction of the world's 
remaining giant sequoias, and these fires have released massive 
quantities of harmful air pollutants.
    They challenge our carbon emissions goals, they threaten 
human health, and they do that for the most vulnerable. Put 
succinctly, human lives are disrupted, species are imperiled, 
and our economy suffers. The causes are nuanced, but to combat 
this wildfire crisis all land management tools should be 
available to protect human life, property and biodiversity.
    Development that recognizes inherent risk, tactics that 
acknowledge a changing climate, and a vastly expanded and 
educated prescribed fire force are needed to tackle the 
wildfire crisis. Human development in the wildland and urban 
interface is a clear challenge. Climate change, particularly in 
dry forests of the western United States exacerbate, and past 
land management strategies that have largely ignored the 
consequences of a century of fire suppression.
    In those landscapes, forest management activities that 
increase the resilience of forests, while also modifying 
available fuels are fundamental to solving the wildfire crisis 
we face. When done right, active management sustains forest 
carbon, which also leads to ecological resilience, enhanced 
biodiversity vibrant rural communities and reignited cultural 
connections.
    Ultimately, the most viable tool to reduce these out of 
control wildfires, and thus reduce costs, will be the expanded 
use of prescribed fire. In order to reach that point we advise, 
and the scientific community largely supports, increased 
funding for workforce training, for improvements in prescribed 
fire science, and increased liability protection for those 
burners that literally carry a torch.
    Congress has already stepped up in a bipartisan way to 
ensure that the tools are available to reverse these trends. 
These investments, and the continued investments will enable 
private and public lands to confront the wildfire crisis with 
the best of our country. Our global leadership in science, in 
education, and our unmatched work ethic. I'm looking forward to 
answering your questions today on wildfire, and prescribed fire 
solutions.
    Tall Timbers and the southern fire community rely on the 
strong partnerships with the federal government, and I 
appreciate the opportunity to discuss this important issue 
farther. Thank you.
    Chairman Whitehouse. Thanks Mr. Varner. Much appreciated, 
and we turn now to our final witness. Mr. Loris, thank you for 
being here. Please proceed.

 STATEMENT OF NICHOLAS LORIS, VICE PRESIDENT OF PUBLIC POLICY, 
                        C3 SOLUTIONS \7\
---------------------------------------------------------------------------

    \7\ Prepared statement of Mr. Loris appears in the appendix on page 
66.
---------------------------------------------------------------------------
    Mr. Loris. Thank you Chairman Whitehouse, Ranking Member 
Grassley, and distinguished members of the Committee. Thank you 
for this opportunity to testify this morning. My name is Nick 
Loris, and I'm the Vice President of public policy at the 
Conservative Coalition for Climate Solutions. C3 Solutions is a 
think tank focused on accelerating innovation to meet the 
world's energy needs, and to help address the world's greatest 
environmental challenges.
    With my time I'd like to make three brief points. First, to 
look at the causes and influences driving severe wildfires. 
Second, the economic and environmental impact of wildfires, and 
third, solutions to help reduce wildfire risks and damages.
    Many factors contribute to the severity and intensity of 
wildfires. Human driven climate change has made the world 
hotter, and parts of the world drier, including the western 
United States, which reduces soil moisture and lengthens 
wildfire seasons. Continued warming will very likely exacerbate 
those conditions. Population growth, and where people choose to 
live is a significant contributor to wildfire risk, as more 
people have moved into the wildland urban interface where 
development meets wilderness.
    Homes in the WUI grew 41 percent from 1990 to 2010, and a 
recent report by FEMA and the U.S. Fire Administration stated 
that 99 million people live in the WUI, and there are 46 
million homes with an estimated 1.3 trillion dollars in value 
at risk of wildfires. Critically, research shows that the fuel 
load on federal, state and private forests is the driving 
factor that makes wildfires larger, hotter and more 
destructive.
    The fuel load is anything that can burn from grass, shrubs 
and small trees to dead leaves and materials on the forest 
floor. When a fire occurs in a forest with a full fuel load, it 
is significantly more intense and widespread, and therefore 
much more difficult to contain. Without proper management, 
whether to prescribe burns or mechanical thinning, these 
forests become tinder boxes.
    And when these fires blaze they are devastating. They claim 
lives. They have adverse effects on people's physical and 
mental health. They destroy communities in minutes or hours, 
which will take years to recover and rebuild. In 2021 alone, 
wildfires burned nearly 6,000 structures, 60 percent of which 
were residences.
    Wildfires cause a significant loss of wildlife, vegetation 
and habitat. In the years 2015, 2017 and 2020, more than 10 
million acres burned in the United States, more than six times 
the size of Delaware each time. They increased particular 
matter, they increased greenhouse gas emissions, and increased 
the risk of erosion.
    Furthermore, wildfires are costly to the taxpayer and the 
broader economy. The five year average for federal suppression 
costs is more than $2.8 million annually. A recent study in the 
American Economic Association Journal totaled the suppression 
costs for 11 western states to be more than $13 billion from 
1995 to 2016.
    More wide ranging estimates of both direct and indirect 
costs of wildfires show that annualized losses can be in the 
tens, if not hundreds of billions of dollars. To reduce these 
costs, policymakers must act with urgency. Global 
decarbonization will help minimize human induced warming's 
impact on wildfires and wildfire seasons.
    Part of that solution is healthy U.S. forests, and working 
cooperatively to ensure that these forests are carbon syncs, 
not carbon sources. The most pressing issue for forest managers 
and communities threatened by wildfires is this density and 
overgrowth. Productively, the Biden administration recognizes 
what's at stake, unveiling an aggressive and necessary plan to 
expand foresting and prescribed burns on 20 million acres of 
national forest lands, and 30 millions acres of other federal, 
state, tribal and private lands, all within a decade.
    Yet protracted regulations and litigation often delay the 
implementation of these plans. A June 2022 report from the 
Property and Environment Research Center examined how long it 
takes the Forest Service to comply with the National 
Environmental Policy Act requirements. The authors found that 
it takes 3.6 years on average from initiation to treatment for 
mechanical thinning, and 4.7 years on average for prescribed 
burns.
    More rigorous environmental reviews and lawsuits delay 
projects even further. Cutting red tape for greener forests can 
and should be consistent with rigorous environmental review and 
safeguards, but analysis paralysis and seemingly endless 
litigation takes away precious resources and more importantly, 
precious time where year's long delays could be spent on the 
ground reducing the fuel load.
    In addition to streamlining environmental review processes, 
expanding collaborative partners and harnessing positive 
incentives with states, non-profits, tribes and the private 
sector will help treat and restore forests. These relationships 
can assist in deploying innovative technologies like satellites 
and drones, and predictive algorithms for early detection and 
communications.
    They can help with on the ground treatment, and with 
eradicating evasive species. And they can help address seed 
shortages and forest restoration after a wildfire has burned 
through. In conclusion, healthy forests provide many economic 
and environmental benefits to communities and the planet. If 
improperly managed, however, America's forests are an economic, 
environmental and public safety liability.
    Modernizing policies to empower people in all levels of 
government, and in the private sector to take care of America's 
forests will save lives and livelihoods, protect the 
environment, reduce costs to the taxpayer, and lessen overall 
damages to the American economy. Thank you, and I look forward 
to your questions.
    Chairman Whitehouse. Thanks very much Mr. Loris. The order 
of questioning after myself and the Ranking Member will be 
Senator Padilla, Senator Romney, Senator Lujan, Senator Murray, 
Senator Wyden and anybody else who thereafter appears here. Let 
me start with some questions for Mr. Burt if you don't mind.
    In your discussion of your so-called Bear case, you used 
the phrase systemic failure. We hear that regularly as this 
committee looks at the climate risks. Could you give us a 
definition of systemic failure?
    Mr. Burt. Sure in the Bear case that I described, market 
value losses across residential market growth from about $1.2 
trillion. This is including repricing of both flooding and 
wildfire risk, so flooding is actually reasonably comparable, 
slightly bigger problem. And that rose to about $2\1/2\ 
trillion in market value losses, which while less than the 2007 
to 2012 correction, still creates a situation where the 
mortgage market probably has little pockets of failures from 
lenders and servicers.
    And actually, the market that supports the credit risk 
within the U.S., which is a market called credit risk transfer, 
that was put in place to protect the taxpayer from mortgage 
losses after the large mortgage agencies got put into 
conservatorships.
    Chairman Whitehouse. Define the term systemic failure is 
what I meant.
    Mr. Burt. Yes. So a systemic failure is essentially it 
becomes so costly for anybody to get a mortgage that you have 
huge knock on effects on things like labor markets, and big 
increases.
    Chairman Whitehouse. So the economic harm cascades beyond 
the immediately effected economic sector into the rest of the 
economy.
    Mr. Burt. Exactly. So, it makes it so that you face huge 
economic consequences similar to the 2008 crisis.
    Chairman Whitehouse. You've talked about foreclosure rates 
as high in one in ten families in affected areas. You've talked 
about that being 115,000 foreclosures associated with $317 
billion in loss in your base case, 240,000 foreclosures 
associated with $495 billion in loss in your Bear case. This is 
obviously very serious.
    The last hearing we had was about sea level rise and 
coastal storm risk, and the danger of that affecting the 
ability of a coastal home owner to get insurance, and therefore 
the ability of a coastal home owner to get a mortgage, and 
therefore the ability of a coastal homeowner to sell to the 
next buyer, who then can't get a mortgage, and the disruption 
in the supply demand equation, causing prices to plummet.
    The witness from Freddie Mac said that that could create 
systemic risk, and it could be as bad as the 2008 mortgage 
meltdown. Is there any reason that the coastal property values 
crash predicted by Freddie Mac, and the potential systemic risk 
of your Bear case, or something near it in the wildfire sector 
could not occur separately and at the same time. It's not an 
either/or proposition is it?
    Mr. Burt. No. And in fact, you know, I think they're both 
at play right now again based on the high frequency data that 
we're observing around sales growth trends for these impacted 
properties, and for the wildfire situation is much more about 
insurers just not underwriting properties, and that's again 
growing substantially year after year.
    And a pause that has been put in place through the 
moratoriums in California are temporary. And the flood side, it 
has much more to do with national flood insurance program, 
which underwent a very large repricing effort.
    That rolled out October 1 in 2021. Both of those dynamics 
are having consequences on your rear sales growth that follow 
our road map for that base case loss scenario almost to the 
tee.
    Chairman Whitehouse. Okay. Mr. Loris, first of all I noted 
that you cited the IPCC as one of your resources. I assume 
that's because you find those reports to be credible?
    Mr. Loris. Yes sir.
    Chairman Whitehouse. And you gave perhaps second to 
Commissioner Serna the best personal description of what this 
means when you described all of the families possessions being 
destroyed in seconds by wildfire. On page 7 of your testimony 
you talk about an economic burden of $347.8 billion. Do you see 
that? You talk about economic costs of $62.8 billion. And you 
talk about economic losses of $285 billion.
    Could you just define for the record here what you mean by 
economic burden as opposed to costs, as opposed to losses, and 
does one add those together, or are they--do you break them out 
from one another?
    Mr. Loris. Yeah. Those numbers come from a study that was 
done by the National Institutes of Standards and Technology, 
and they cover a wide range of costs, including the direct 
suppression costs, and including a lot of the indirect costs, 
loss to businesses, wildfires, a cost of rebuilding, the costs 
of healthcare, you know, all of those costs, even you know, 
trying to assess--
    Chairman Whitehouse. They're separate numbers, separate 
categories, and one could conceivably add the three together to 
predict the total economic harm?
    Mr. Loris. That's right. Yes.
    Chairman Whitehouse. Okay. Well I'm over my time a bit. Let 
me turn to Ranking Member Grassley.
    Senator Grassley. Well thanks to all of you for your 
testimony today, and I'm assuming that Dr. Varner is the only 
one that managed a forest fire, but just to be clear, have you 
Mr. Burt? Yes or no?
    Mr. Burt. No.
    Senator Grassley. Okay. And then Commissioner Serna? Yes or 
no.
    Honorable Serna. No.
    Senator Grassley. Okay. And Mr. Loris, yes or no?
    Mr. Loris. No.
    Senator Grassley. And let's see I got Burt. I left out Mr. 
Wara.
    Mr. Wara. I have not.
    Senator Grassley. Okay. So, now to my questioning for Dr. 
Varner you have. You made very clear. So, last week I invited 
the only environmental scientist to this climate hearing on 
coastal issues last week. This week I invited the only witness 
who has managed a forest fire to the hearing on wildfires. 
Given your unique expertise, Dr. Varner, what do you believe is 
the dominant reason for escalation of wildfires in the west 
over the past 30 years?
    Climate change may play a role, but is it even in the same 
ballpark of influence of forest management?
    Dr. Varner. Thanks for your question, Senator Grassley. But 
first I would invite all of you to Tall Timbers sometime to 
participate in a prescribed fire. Your question is a 
complicated one. I think the scientific consensus is that land 
management actions and path suppression of wildfires was 
detailed by several witnesses earlier, are the dominant factor 
controlling recent wildfires.
    And I think to go a little farther, Mr. Burt's testimony 
really to me puts it in a nice framework. If we were to be able 
to reduce carbon dioxide concentrations in the atmosphere 
immediately, then we could make an argument about climate 
change and land management. But we know that reversing that 
trend is a long, multi-decade endeavor. And in the meantime 
those forest lands will be threatened by the lack of management 
that we're not employing to mitigate those hazards. And I think 
that's a tragedy that we all want to avert.
    Senator Grassley. You took part in the forest fires chiefs, 
or forest service chief's national prescribed fire program 
review in response to Hermits Peak and Calf Canyon fire, which 
Commissioner Serna discussed in her testimony. What was your 
role in that review?
    Dr. Varner. To work on one of the panels on the agency 
culture, and the review that the forester's chief challenged 
the participants with was to--in order to get to where we want 
to be with prescribed fire nationally. What do we need to do? 
What do we need to change?
    He considered a panel considering climate change, and the 
panel I served on was on the agency culture. In essence, how do 
we prioritize prescribed fire and put it on an equal footing 
with the importance and the priorities of wildfire.
    Senator Grassley. Do you believe that climate change is 
ultimately to blame for the damage caused by this wildfire?
    Dr. Varner. It's certainly part of the story. I think the 
post-wildfire review shows pretty clear that there are some 
inadequacies, and I know that these were frustrating and 
painful for members and witnesses, but we need to continue to 
invest in science, and to develop decision support tools that 
enable us to predict our behavior better.
    We need to train and educate our workforce better, and I 
think each of those are detailed in that report, and frankly 
that comes up in a lot of prescribed fire reviews, or in 
wildfire reviews, is improving the workforce, investing in the 
workforce, and trying to level the playing field between 
research funding for wildfire versus research funding for 
prescribed fire.
    The federal government and other funds are quick to fund 
research on the effects of, and often causes of wildfire, but 
the corresponding investment in prescribed fire is often 
lacking. And we've long argued for some equal footing, and I 
think the chief's panel and other recent reviews all point to 
investing in science that will generate better decision support 
tools, and they will have a real effect on the ground.
    Senator Grassley. Could I ask one more?
    Chairman Whitehouse. Please do. I think we're waiting for--
to return, so take some time.
    Senator Grassley. My last question is to Mr. Loris. Could 
you explain how overly burdensome reviews will inhibit the 
ability of the Forest Service to accomplish its goal of 
creating 20 million acres of national forest and grasslands 
over the next decade?
    Mr. Loris. Yeah. You know there's a huge challenge in terms 
of the large restoration backlog that the Forest Service has to 
tackle. If you look at the challenges of meeting the National 
Environmental Policy Act requirements, you know, as I mentioned 
they can take anywhere from 3.6 years on average for a chemical 
thinning, and 4.7 years on average for prescribed burns.
    If you add in the most comprehensive level of NEPA analysis 
and environmental impact statement, those numbers increase 
significantly. If you add in litigation those numbers increase 
significantly as well where it can take almost 10 years to do a 
prescribed burn. There have been kind of horror instances where 
there's been areas at high risk, and it's taken 15 years to do 
a prescribed burn.
    And again, that's not to say we shouldn't have the 
availability of litigation, that we shouldn't have 
environmental safeguards and rigorous environmental reviews, as 
well as having communities who are impacted by these decisions 
to give them input. You know, we don't want to have prescribed 
burns with undue risk.
    But I do think there's opportunities to create efficiencies 
in these processes to a point where even Forest Service 
officials have noted that they've become almost too risk 
adverse to try and litigate, prove some of these analyses, and 
that's kind of allowed the perfect to be the enemy of the good 
in a lot of circumstances where we can have productive 
processes to have mechanical thinning, to have prescribed 
burns, and to reduce wildfire risks.
    Senator Grassley. Thank you. Thank you Mr. Chairman.
    Chairman Whitehouse. Thank you. I'm going to ask a few 
questions while we wait for a colleague to come to the hearing, 
and let me turn to Commissioner Serna. You gave very passionate 
testimony about the effect on your community, including the 
emotional effect of all the harm and disruption that was 
caused.
    We are the Budget Committee, and so we're focusing 
particularly on how these climate risks turn into dollar harms. 
And I assume that it has hit your community in a lot of 
different ways, and lost revenues, and healthcare costs, and 
under insurance and loss of revenue, but if you could just give 
us a bit of a fiscal overview in what you think the effect has 
been for Mora County?
    Honorable Serna. So, as I mentioned earlier our county is 
one of the poorest counties in New Mexico. We operate on a 
budget just over 2 million dollars. Dealing--responding to this 
fire when it first broke out really dipped into that budget 
with the overtime, the cost of excessive fuel for the vehicles, 
having to bring in meals to the first responders on a daily 
basis two times a day because as I mentioned there was no 
electricity.
    It has really affected us. The reimbursements from FEMA 
have not yet come in. I'm not sure when that will happen. We're 
almost--we're halfway through our fiscal budget this year, and 
it's beginning to take a toll on us.
    Now the future of Mora County is still a question on how 
we're going to operate because we have lost so many structures. 
The tax base obviously is going to drop. Many of these people 
have been displaced. I'm really concerned that they're not 
going to come back home. Many of these people probably will not 
build back, so that revenue will not come back on either gross 
receipt tax, or property tax.
    So I'm just not sure how we can rebuild and make it 
attractive for these people to come back home.
    Chairman Whitehouse. Thank you very much. Senator Romney 
has arrived from Utah, which is designated by hazards.utah.gov 
as one of the most wildfire prone states in the U.S., so I'm 
delighted that he is here. Senator Romney.

                  STATEMENT OF SENATOR ROMNEY

    Senator Romney. Thank you Mr. Chairman. I realized Rhode 
Island is not quite at the same risk as Utah, and I appreciate 
your bringing this attention to our entire conference, and 
Senate. A couple of things. My state is about 70 percent owned 
by the federal government, and so we care particularly about 
what's happening in the national forests, and wildfires is a 
major issue in our state.
    Each of you have mentioned global warming, and human's 
participation in creating global warming. I would posit that 
it's not going to go away. Global warming will continue, 
emissions continue to rise. I've seen no studies whatsoever 
that suggest there's any way the world is going to reduce the 
amount of emissions that are emitted over the coming decade or 
two, nor is there going to be a reduction in the warming of the 
planet, or the climate change of the planet, unfortunately.
    So, we're going to have to deal with the reality that 
wildfires are going to become an increasing problem. And 
presumably, in the American west where the drought conditions 
have been severe over the last couple of decades and may 
continue. So that means we have to think about, okay, how are 
we going to deal with this?
    And we can't just keep on doing--or responding to fires as 
we have in the past because our conditions have changed. First 
of all in terms of reducing the number of fires started. Our 
state actually has begun a problem of contacting people with 
alerts, and about fire danger, and that has had an impact on 
reducing the number of human caused wildfires. So I would 
suggest that as at least one thing we consider, even at the 
federal level, or at least encouraging states to consider.
    But number two, the fuel load as you've described, is in my 
opinion, perhaps the greatest concern, and it has the greatest 
potential for remediation. As I look back on the 1990s the 
average number of acres burned was about oh four, maybe four 
and a half million acres per year. Now the number is up at 
about 7 million acres per year or more, so almost a 50 percent 
increase going from the 90s to the 2000s, the two decades of 
the 2000s.
    And so, when you consider that change, even though the 
number of fires started was the same, the number of acres 
burned has almost gone up 50 percent, or almost double. And so, 
the challenge is how do we reduce the fuel load? And in my view 
that relates to the management of the forest. Controlled burns, 
as well as removing dead wood out of the forest when it does 
die, so it doesn't just sit there and become a cause of 
potential conflagration.
    Mr. Loris is that correct? Do you have a perspective that 
fuel load is one of the key things we can move on to make a 
change in the devastating nature of these fires?
    Mr. Loris. Yeah. Absolutely. You know, and again I think 
fixing some of the regulatory processes to allow these, you 
know, mechanical thinning, to allow prescribed burns to happen 
more efficiently is a viable and necessary option.
    I also think the expansion of collaborative partnerships 
that we've seen with the states and the Forest Service through 
the good neighbor authority, as well as the Root and Stem Act 
that has bipartisan support with Senator Feinstein, and Senator 
Daines as an opportunity for non-profits and the private sector 
to work together to establish some positive relationships that 
can be a win/win in terms of finding and harnessing the 
economic value of some of this small timber, whether it's for 
cross laminated timber, or if it's for wood chips, whatever the 
case may be, but also reducing those wildfire risks.
    Senator Romney. Yeah. I would note two areas I think we 
have to look at. One is for controlled burns. We in our state 
have a hard time doing them at the right time because we have 
to do environmental reviews and get federal approval to do the 
controlled burn, and by the time we get those approvals the wet 
season, or a wet period has gone, and we can't do the 
controlled burn.
    So one, we need to speed up the process for giving 
approvals on controlled burns. Number two, we've got to put in 
place the long-term contracts for logging dead wood as opposed 
to just annual contracts. No one is going to build a logging 
facility for a one year return. There's also the concern about 
firefighting, and the capacity that we have to fight these 
fires.
    The Infrastructure Bill that we put in place a year ago, 
put in place a Commission which is looking at how we fight 
fires, and how we reduce the risk of fires. They've now met 
once. They've got about 50 people. They divide them into task 
forces. One recommendation that's already clear as we don't 
have enough fixed wing aircraft to be able to respond 
immediately to fires that could become conflagration. So that's 
another area I think we need to focus on.
    And finally, the response, the recovery after a fire. It 
takes too long to remediate after a fire. I don't know whether 
any of you have any experience in that regard, but the time it 
takes the federal government to allow us to remediate a forest 
that's been burned is too long. It results therefore in more 
flooding occurring, more damaging to the watershed as a result 
of the flooding. We need to speed that up. Do you have any 
experience, any of you in that regard?
    Mr. Loris. No experience, but I did note in my written 
testimony, you know, some things that we can do to address seed 
shortages, you know, and having more practitioners is to have 
more immigration. Expand H2B visas, you know this is something 
that can help with the collection of seeds, as well as to have 
more ecologists, more firefighters come in.
    So that necessary step in the year or two after the fire I 
think is critical in terms of restoring these areas as 
effectively as possible.
    Senator Romney. Thank you Mr. Loris. Keeping on doing the 
things we've been doing them is not the right way to go.
    Thank you Mr. Chairman.
    Chairman Whitehouse. All right. We have Senator Murray, 
Senator Padilla, and Senator Lujan.

                  STATEMENT OF SENATOR MURRAY

    Senator Murray. Thank you. Thank you very much Mr. 
Chairman. And thank you to all of our witnesses for lending 
your expertise to this discussion today. You know, climate 
change really means devastating wildfires are quickly becoming 
the new normal. We have seen that in my home state of 
Washington, and we know that that comes at a real cost.
    More wildfires mean more adverse effects for people's 
health. We have seen smoke non-ending in the fall in our state 
that is affecting people's health. We see obviously more loss 
of property and more rehabilitation costs for our communities. 
And as these catastrophic fires grow in size and frequency, our 
wildfire suppression funding has to keep pace, and this can't 
be at the expense of mitigation and prevention efforts.
    We are already seeing the costs of wildfire suppression 
will outpace where we thought we would be in 2018, when we 
secured a bipartisan wildfire funding fix as part of our 
spending bill. And that Fire Funding Fix was a bipartisan 
solution to end the untenable fire borrowing cycle that took 
away money from forest management and activities to fight 
wildfires.
    Now here we are just a handful of years later, and it's 
really clear that the authorized funding levels in our wildfire 
reserve fund do not meet our current suppression needs, or 
properly address the new reality of our fire seasons that are 
dominated by very large, and very destructive fires.
    We can and we have to update the cap adjustment for fire 
well ahead of the expiration date. That's an important step to 
account for the severity of fire seasons we now face, and I 
want you to know I'm very focused on getting that done swiftly 
as Chair of the Appropriations Committee.
    And I look forward to working with our republican 
colleagues to do just that. Now in my home state of Washington 
we are familiar with the destructive capacity of wildfires. In 
2020 the towns of Malden and Pine City were nearly wiped off 
the map, and those communities are still working to rebuild and 
find ways to mitigate their fire risk. So my question is for 
Commissioner Serna. Can you speak to the impact on your 
municipal budget as you work to rebuild and to the unique 
challenges posed for rural communities, their responding to and 
preventing future fires?
    Honorable Serna. Thank you. I first all, Mora County is not 
incorporated. We still operate an accounting budget, and how 
we're going to deal with this I don't know. We do have a lot of 
volunteer firefighters that stepped up to the plate in this 
fire, and saved our local communities. I just don't know. We've 
got plans to start applying for grants for a wildfire 
coordinator, and a full-time emergency manager.
    And we are going to make our fire coordinator a full-time 
position as well. With that, I don't know how much we can do 
with mitigation, and dealing with the forest.
    I think we are going to start creating partnerships, 
stronger partnerships with the Forest Service to work together 
to deal with private properties, and of course, the federal 
lands to hopefully mitigate future damage.
    Senator Murray. Well thank you for that. And certainly, Mr. 
Chairman, as you are showing at this budget hearing, there is a 
real cost. And the federal government has to step up to support 
these communities to help mitigate the risks, and help rebuild 
in the years following these fires.
    So let me just close by saying that I'm very proud of the 
climate action and wildfire related investments that we were 
able to secure in the Inflation Reduction Act, that will help 
support some healthy fire resistant force, and put us on a path 
to cut emissions by nearly 40 percent by 2030.
    And also the bipartisan Infrastructure Law, which provided 
salary increases for our federal wildfire, wild land 
firefighters and additional community forest management 
resources in coordination.
    But tackling this head on is really going to take an 
integrated whole of government approach, and we have to 
continue to meet this moment, and account for the severity of 
fire seasons that we're facing. That's going to mean taking a 
hard look at how we can save ourselves a lot of headache, 
heartache and money in the long run by making smart 
investments, and cutting emissions in federal wildfire 
prevention in response efforts now.
    So, I hope that that can be a bipartisan undertaking as we 
move forward. But Mr. Chairman, I think this hearing is very 
critical in everyone's understanding of the severity of these 
wildfires, the cost to local communities, to the federal 
budget, and why we need to continue to focus on taking action. 
So thank you.
    Chairman Whitehouse. Thank you Chairman Murray. We turn now 
to Senator Padilla.
    Senator Padilla. Thank you Mr. Chair. I think this is a 
perfect lead in to my first question. We have the Chairs of the 
Budget and Appropriations Committee side by side, and I think 
we all can agree when we say that it was great to see the 
recent $8.4 billion in wildfire investments in the 
Infrastructure Investment and Jobs Act, and the Inflation 
Reduction Act. But we have to put that figure into context.
    The federal government spent on average $2.8 billion every 
single year to put out wildfires. So if you do some simple math 
you come to the conclusion that the amount spend on putting out 
wildfires will eclipse our historic investment in preventing 
wildfires in just three years.
    As Mr. Wara so astutely noted in his testimony, these funds 
must be the beginning, not the end, in our investments to 
prevent wildfires. The federal government must continue to 
increase funding for protecting communities, and ecosystems 
from catastrophic wildfires because the reality is that the 
wildfires of 2020, which Mr. Chairman, you referenced in your 
opening, California's worst wildfire year on record will pale 
in comparison to the wildfires of 2030, or 2040 unless we 
change our practices.
    Mr. Wara, many members of this Committee and the Senate as 
a whole are quick to share their concerns about federal 
spending levels, or they consider return on investments in 
making their decisions, or cost benefit analysis. Can you 
explain why mitigation funding represents the best bang for the 
buck for the American taxpayer?
    Mr. Wara. Thank you for the question. It's clear from 
experience in the west that mitigation funding can 
significantly reduce costs, both for communities like 
Commissioner Serna's, for fire suppression costs, which are on 
the federal dime, and also for the emergency response costs 
that FEMA steps in to help with in the national emergency 
declarations that typically follow truly catastrophic fires.
    So I think there's a clear path forward for actually saving 
money for the federal government, substantial sums of money in 
terms of its management of federal lands. If we can shift the 
balance towards mitigation and away from a kind of runaway 
freight train spending on wildfire suppression, doing that is 
going to require just what you said, Senator Padilla, 
recognizing the historic investments that you have made over 
the past year in wildfire are a downpayment.
    But that we need to get into a situation where we're 
actually paying the mortgage for the true costs of wildfire in 
the west. And that means supporting communities. It means 
focusing the mitigation where it's going to matter the most, in 
terms of protecting people and communities and families in the 
west. And I'm hopeful that we're moving in that direction, and 
that we can build momentum with the investments you're making.
    Senator Padilla. Thank you. Now the science shows that 
conserving our largest and oldest trees is crucial in the fight 
against the climate crisis. The EPA inventory of U.S. 
greenhouse gas emissions shows forest lands provide more carbon 
storage than any other land use in the United States. Our 
oldest forest do the largest share of the carbon sequestration 
work.
    Mature and old growth forests have been carefully capturing 
greenhouse gases over the course of centuries. The destruction 
of these trees, including by wildfire, releases these harmful 
greenhouse gases back into the atmosphere. Now California 
forests make up one-third of the state's total land area. 
However, due to the catastrophic wildfires and drought induced 
tree mortality, California's forests have unfortunately stopped 
regulating emissions, and instead has begun contributing to 
them.
    Mr. Wara, can you speak to the importance of federal 
investments in forest management, in particular, specifically 
for mature and in old growth forests, and how these investments 
could also reduce emissions and promote resiliency.
    Mr. Wara. Absolutely. So what we're observing in California 
forests is kind of a there part crisis. The first is wildfire. 
The second is drought caused mortality. And then both of those 
are also supplemented by beetle kill, which is also a big 
factor in other western forests.
    And the reality is that that's happening because trees are 
so close together that they are intensely in competition with 
each other, and that's for water, for nutrients, and they're so 
close together that when fires occur the entire forest is 
torched. And so, what fuels management can do is return the 
forest to something like it's natural state where there's a 
greater spacing between trees.
    And that means the trees are much more likely to survive 
drought. They're much more resistant to beetle kill, and when a 
fire passes through it's not just likely to kill the entire 
forest. So, there are big returns because we keep the forest 
intact. Recent science, that you just got last week from the 
lab group at Stanford shows that there are a number of forests 
as well that may not regrow because of climate change if they 
burn.
    The longer we can keep those forests stable and in place, 
the lower the impacts of climate change.
    Senator Padilla. Thank you very much. I'll just end with a 
note that while it's been a California specific line of 
questioning, this really applies to the broader western United 
States. Thank you Mr. Chair.
    Chairman Whitehouse. Thank you Senator Padilla. We turn now 
to Senator Lujan followed by Senator Braun.
    Senator Lujan. Thank you Mr. Chairman. I appreciate that. 
The Hermits Peak Calf Canyon fire has upended life for 
communities in northern New Mexico. Commissioner Serna, can you 
speak to the challenges during the period of active burning, 
and subsequent flooding? And in what ways was the federal 
government effective in supporting Mora, and how can it do 
better?
    Honorable Serna. Thank you Senator. First of all it was 
extremely challenging. As you know the residents of Mora County 
are used to dealing with wildfire because they usually come 
later in the season as a result of lightning, and along with 
lightning comes rain. So Mother Nature has been able to help 
firefighters deal with those fires.
    However, in this case, it came much earlier during the 
extreme drought, and the unprecedented winds. We evacuated 
people, and they expected to be gone for two or three days. 
Five weeks later people were still out of their homes. The 
challenge that we faced, as you said, the federal government 
sent FEMA in quickly. The unfortunate thing, and the very 
challenging thing about that was that because we had no 
communication it was very difficult to communicate with our 
people to let them know where FEMA was at.
    We were in evacuation mode into almost June, and services 
were scattered everywhere. People were scattered everywhere. We 
couldn't keep track of them. So that was very, very 
challenging. I think that again that happened with the flooding 
events. We still had limited communication with our people, so 
we had to go pretty much pay attention to the weather forecast, 
go door to door knocking on people's doors letting them know 
that the potential of flooding could be happening in their 
area.
    And sure enough it would happen. And we tried to get people 
out of there. Getting them accommodations was very challenging 
because firefighters had taken up I think every single hotel 
room from Taos to beyond Santa Fe, so it was very challenging 
to get accommodations for these people. And when we did have to 
evacuate them, but as I said FEMA was there quickly.
    They were helping people as much as they could. I think 
that one of the challenges that could improve services in the 
future is that FEMA have employees that are more sensitive to 
the culture because I realize that many of the employees that 
showed up did not understand our culture, did not understand 
how the people communicated in our community, and it created a 
lot of confusion and frustration amongst the people.
    And many of these people just left and never came back for 
more help, and these are probably the people that needed it the 
most.
    Senator Lujan. Commissioner Serna, remind me of the 
volunteer who was at West Las Vegas High School that wanted to 
prepare hot meals. Do you remember her name?
    Honorable Serna. Yeah. Jana Lopez.
    Senator Lujan. I think that's her name. Miss Lopez.
    Honorable Serna. Neighbors helping neighbors, she was 
amazing. She's been our hero.
    Senator Lujan. Mr. Chairman, one of the areas where it 
illustrates what Commissioner Serna just laid out is there was 
a volunteer from the community that wanted to prepare hot 
meals. She said my people are not going to eat cold meals. So 
she showed up with cookers and all the rest. And FEMA said 
you're not allowed to bring hot food in here.
    She didn't take no for an answer. She went outside and she 
set up the tailgate, and she started prepping hot food out 
there. Eventually, policy changed, but that's just one example 
to illustrate the kindness and how ultimately it was embraced, 
and hopefully it will be to a shift in policy as well.
    The other thing Commissioner Serna, that you reminded me 
through your testimony, is that it's not a fire season any 
longer. Out west, as you know Mr. Chairman, it's a fire year. 
And that's what concerns me most about what we're experiencing 
in New Mexico. Commissioner Serna, can you share the biggest 
challenges from what accounting to make a full and long-term 
recovery from a local government perspective as a result of the 
fire?
    Honorable Serna. Probably economic development. I think 
that we need to do as much as we can to improve the economy in 
Mora in order to bring back the residents that have left. We 
need to make it as attractive as we can. We need to work 
together to provide the services that have been lacking.
    As I mentioned, communication was an issue at the very 
beginning. We're 12 months out now, and we're still having 
communication issues. We see that with broadband and cell 
service.
    Senator Lujan. I appreciate that Commissioner, and to 
illustrate Mr. Chairman, one aspect that you've raised as well 
in that the impact--the terrible impact from these fires, it's 
not that an outside is burned, homes are lost, fences are lost, 
communication is lost, food, families--very humble families, 
but resilient families where they would go harvest a deer or an 
elk, and they would prep that, and they would keep that to keep 
their family fed for a long period of time, months and months, 
was all lost because electricity went out.
    And so, you talk about how families were impacted. They 
plan year round on how to take care of themselves and their 
families. So, I very much appreciate this hearing. Mr. Wara, I 
have a question. I'll submit it into the record because it's a 
lengthy answer I'm guessing, but I want to thank the Chair for 
his time.
    Chairman Whitehouse. Thanks Senator Lujan. Senator Braun?

                   STATEMENT OF SENATOR BRAUN

    Senator Braun. Thank you Mr. Chairman. Interesting topic. 
I'm from the Midwest, Indiana, and I think the only bonafide 
tree farmer in the U.S. Senate is Greg Therapy. For my new job 
I go back, and I got a couple hundred trees to plant over the 
next 30 days.
    But our biggest issue in the Midwest would not be 
wildfires. We don't have them generally. It would be invasive 
species. That is turning timber management upside down. And 
since this is about wildfires in the west, can you or any of 
the panelists weigh in, in terms of how invasive species 
complicate a drier context because knowing silver culture 
they're both going to weaken the timber stand, whatever you 
have.
    And I know since it's a chronic issue to some extent, just 
lacking moisture where do invasive species come into play to be 
a complicating, even additional issue, and help me understand 
the interplay of those two as it relates to western forests.
    Mr. Wara. Well I was sure hoping Morgan would jump in, but 
I'll offer an answer. I think the biggest issue in western 
forest is really beetle kill, and this relates to something 
that I'm sure you're familiar with.
    Senator Braun. Is that the native or an invasive?
    Mr. Wara. The beetles are native, but the effects, the 
ability of the beetle to propagate has really grown enormously 
over the last several decades, so that we're seeing large stand 
killed, and numerous trees within stand killed, even if some 
other trees survive.
    Evidence suggests that this partly has to do with warmer 
winters, and it also has to--because the cold winters to sort 
of shut down the beetle lifecycle. It also has to do with the 
fact that the trees are stressed because they are too close 
together. So I'm sure as you plant a stand on your plantation.
    Senator Braun. You think then generally through sustainable 
management practices, and you get the ideal amount of light and 
then ground nutrients, and you grow the fastest and healthiest 
trees.
    Mr. Wara. Precisely, and the challenge is that many trees 
in the west are so close together that the combination of the 
warming, drought, and the competition for nutrients is making 
the trees even more vulnerable to these parasites species.
    Senator Braun. Should we be harvesting more timber then as 
a prevention for it?
    Mr. Wara. The commercial thinning is certainly a part of 
the solution, but it's only a part, and the key, the most 
successful treatments that create the more, most resilient 
forests, involve some thinning of over dense forest, followed 
by application of prescribed fire. And you need the fire in 
order to get the full benefit in the west, in dry forest.
    Mr. Loris. If I could just quickly add. And there's also, 
you know, native plants that are more susceptible to adding to 
the fuel load. You know, we've seen a proliferation of key 
grass and buffalo grass in the west and the southwest that 
creates more of that tinder for wildfires.
    And I know the national climate assessment has different 
impacts on different types of species, and defoliating species, 
some increase as a result of warming weather, some decrease as 
a result of warming weather. So to your point, I think 
sometimes it's straight forward. Sometimes it's a little more 
complex.
    Senator Braun. So it sounds like in the west and like the 
emerald ash board, you know has been completely wiped out about 
8 percent of our hardwoods, ash trees. Your issue would be more 
comprehensively with a lack of moisture. And then the 
underbrush and native species that then contribute to the 
robust nature of the wildfire.
    Mr. Loris. Yeah. That's right. And I think that soil 
moisture deficient or vapor pressure deficient that Mr. Wara 
mentioned in his testimony, and I mentioned in my testimony, 
it's critically important too. And it's shown to have increased 
significantly in the past four decades, particularly in the 
west, and there is one recent study that I reference in my 
written testimony in the proceedings of natural sciences that 
attribute about two-thirds of that to anthropogenic warming, 
and one-third to natural variations.
    So again, it's a complex number of factors that are 
contributing all of these situations.
    Senator Braun. And then one final question, can we mitigate 
against the trends you've been talking about in a way that 
would if you can't turn around whatever the underlying causes 
are, is there going to be mitigation that could make the damage 
to our forests in the west less significant?
    Mr. Wara. We could certainly lessen the damage in the short 
run, but I think it's pretty clear from the evidence that that 
will work for if we can do it at a really transformational 
scale over the next decade, perhaps two decades. But if we do 
not do something about climate change, we're going to lose the 
war, and lose it for our children.
    Senator Braun. Thank you. Chairman Wyden.

                   STATEMENT OF SENATOR WYDEN

    Senator Wyden. Thank you Chairman Whitehouse, and it is so 
good to see your leadership on these issues. And as you and I 
have talked about, they have dramatic ramifications for both 
public and private budgets. Senator Whitehouse we really 
appreciate your taking the lead, and having this hearing. And 
for all of you, I'm sorry that I've been juggling today, but we 
live and breathe, particularly the breathing part, is the 
horrible, horrible, set of fires we have had.
    And the reality is these fires are not your grandfather's 
fires. They are bigger, they're hotter, and they're more 
powerful. We get them often almost year round. And you know, 
when you go out to these communities as I have, I have town 
halls in every county in my state, in Phoenix, you know, for 
example. They just got devastated by the recent fires.
    And I noticed Mr.--Mr. Wara, that you commented on the Fire 
Funding Fix. I'm the author of that legislation with Senator 
Crapo, so we could end finally this disgrace of fire borrowing, 
where I mean it was bizarre even by Washington, D.C.'s 
standards, where the federal government would go out and borrow 
from the prevention fund to put the fire out, and then 
everybody would say but where's the prevention money?
    And we stopped it. We said the biggest fires are now 
basically going to be treated as the disasters they are. So I 
appreciate your noting that. And by the way the estimates are 
that we saved somewhere in the vicinity of two billion dollars 
as a result of the Fire Fix that Senator Crapo and I wrote, and 
of course, the Inflation Reduction Act, the bipartisan 
Infrastructure Act added funds.
    But here's my question. We know that there's a lot more to 
do. And if anything the centerpiece in my view is further 
professionalizing the workforce, you know, in this field 
because it is now year round. The salaries we've begun to make 
a difference on, but I can tell you I'm going to be in Central 
Oregon this weekend having townhall meetings. And over lots of 
rural communities you will see the signs that say help wanted. 
And they're still paying more than a lot of people who would 
work fighting fire would make.
    So if you're us, and you want to work with Chairman 
Whitehouse and continue these efforts in terms of fire, what 
would be the next best steps in terms of people, technology, 
just pretend you're in charge of the next steps in terms of 
professionalizing folks at the Forest Service Bureau of Land 
Management, who are really doing phenomenal work on the ground, 
but they deserve, as you know, some more resources, so I can 
tell people where those resources might best go.
    Tell us what you think are the best investments in 
professionalism fighting fire.
    Mr. Wara. Well as you point out Senator Wyden, the Fire 
Funding Fix made a tremendous difference, and I could not agree 
more. But the problem challenge is that the problem is 
accelerating so rapidly it's very hard for government to keep 
up. I also agree that there's intense competition for the 
skilled labor, that the skilled workforce that fights our 
fires.
    In California it's much more profitable to be a Cal 
firefighter than a U.S. Forest Service firefighter, and even 
better than that is to get a job as a PG&E arborist. And so, 
there is real competition for the workforce. If youknow how to 
use a chainsaw and drop trees in a very professional and skilled way, 
which very few people do, especially under dangerous circumstances, 
there are many people that want to hire you in the west.
    And the Forest Service needs to offer competitive wages. 
They're moving in that direction, and I think that's really 
important, and we need to double down on that, and make sure 
that we are market competitive with the other potential 
applications. I'd say beyond that we really need to stand up a 
process and programs to train the mitigation workforce.
    We are very good at training firefighters. We need to have 
the equivalently good, and create pathways--career pathways, 
for folks like Morgan Varner, who testified earlier. People who 
want to do the things that are what the firefighters call left 
to bang, right, before the fire happens.
    At the same time I'd just note that I know from speaking 
with many former Forest Service firefighters that the life 
lived by the modern U.S. Forest Service fire professional in 
the current fire environment it's just really tough. The mental 
health challenges are enormous, the separation from family 
strains marriages. And really can break families.
    And I think we need to be looking at structural change in 
how we staff fires to ensure that we can actually recruit and 
retain most importantly, the most skilled firefighters.
    Senator Wyden. My time is up, and I think what I'd like to 
ask is----
    Chairman Whitehouse. It's just us two left, so proceed of 
course.
    Senator Wyden. Great. Thank you Mr. Chairman. I think it 
would be very helpful if you would be willing to do something 
along the lines of a short paper that could flush out here is 
what the Congress ought to be trying to do as it begins to 
further professionalize, you know, the workforce. You're 
absolutely right about these firefighters.
    I mean they have been so courageous, so gutsy, and just as 
you described, I mean they come to my meetings in the rural 
part of the state and say you know, this has just been 
impossible to sustain. I mean they describe, you know, trying 
to pay the rent for example, and trying to make sure that their 
kids have shoes, and do all of the things that we're talking 
about today and that are essentially, and it's just the math 
doesn't pencil out.
    So we've got to figure out you know, wages, at least three 
things would be helpful. Wages, training and technology because 
if we can get those three right you might be on your way to 
being able to recruit. And my staff has been singing your 
praises, and for all of you, we so appreciate it. I'm sorry to 
just as we've had lots of committees today, so I missed some of 
the testimony.
    But for us in Oregon, this is really what we're all about. 
You know, we have forestry in our DNA, and we never expected 
anything like this. Well Senator Mark Hatfield, for example, 
our legendary republican Senator, he would invite us in in 
July, and he would say colleagues, we'll talk about the fire 
season, which basically was August. And that was that. And it 
is, as I say, not your grandfather's forestry challenge.
    And just so appreciate what you're doing, and of course, my 
friend Sheldon Whitehouse, we made the biggest investment in 
climate change in American history last year. It could not have 
happened without the selling of the Chair. Not just his sweat 
equity, you know, the fact that he went to the floor day after 
day, week after week laying it out.
    But in the Committee when we were trying to move a piece of 
legislation to basically unravel the federal tax code, as it 
related to energy, and Senators were casting really gutsy 
votes. You know, votes that could really be career altering. 
Senator Whitehouse was always out there making the case. He 
said, look this isn't everything. We never said it was. It was 
the federal tax code for Pete's sakes.
    But he was out there as somebody who's so well expected 
saying we've got to do this now. I mean this is what's on offer 
today. So I'm very appreciative of Senator Whitehouse's 
leadership, and to all of you who are working the forestry 
precinct, so to speak, thank you, and I gave Mr. Wara an 
assignment, but the rest of you can feel free to pitch in.
    It's not mandatory homework for anybody, but we'd be very 
interested in your ideas. Thank you Mr. Chairman.
    Chairman Whitehouse. Well in Finance, just to be clear, the 
leadership comes from the Chairman, and the Chairman is Ron 
Wyden, so thank you very much for that. We will wrap up. I will 
note that Mr. Varner has described the wildfire risk as 
alarming, and clearly a national crisis with staggering 
statistics.
    Mr. Loris has tried to put some numbers to those 
statistics, and as I understand it the economic burden of 
$347.8 billion that he described annualized, is the sum of the 
$62.8 billion in economic costs in the $285 billion in economic 
losses, correct?
    Mr. Loris. I believe that's right.
    Chairman Whitehouse. Yeah.
    Mr. Loris. I'll go back and doublecheck the study, and I 
apologize for sloppy----
    Chairman Whitehouse. That's okay. Otherwise it's an 
astounding coincidence because 285 is----
    Mr. Loris. I'm pretty sure that's----
    Chairman Whitehouse. So, that's a pretty darn big number. 
Mr. Wara, you have talked about the significant and lasting 
global impact of wildfires in a new climate altered environment 
with what you called ``massive and growing costs'' for 
governments. I'd like to give you the opportunity to add the 
asterisk, the caveat that you put in your testimony about our 
common statement when we look at climate effects on the western 
drought. That the western drought is the worst that we've seen 
in 1,200 years.
    Would you share what your written testimony says about 
that?
    Mr. Wara. Sure. I think that's a typical--just to be fair, 
you know, scientists are careful, and they want to be careful 
not to overstate conclusions, but what's not commonly 
understood about that statement, the worst in 1,200 years, is 
that the record is only 1,200 years long. So it may be a more 
accurate way to put it is it's the worst drought we've 
experienced in the entire historic and paleo record.
    And we really don't know if there's ever been a drought 
that's worse than this.
    Chairman Whitehouse. That's important context, and I 
appreciate it. And I'll leave it to Mr. Burt to make our last 
remarks, because I want to go back to where we ended before. 
You were one of very few people who predicted the mortgage 
meltdown. You then had the unfortunate experience of seeing 
what you had predicted play out with an enormous amount of 
suffering and an enormous amount of economic harm that cascaded 
well beyond the defective mortgages, and entirely across the 
country and throughout our economy.
    Now your testimony today has been about wildfire risk. We 
talked about the prospect of wildfire risk and coastal flooding 
risk, both creating systemic problems as the risk interfered 
with the ability to insure and the comprised ability to insure 
interfered with the ability to mortgage.
    And the inability to mortgage crashed market values, as 
Freddie Mac warned about the coastal property crash, and as you 
have warned today about wildfire. So, the prospect of those two 
things could happen in parallel would create what kind of 
experience for Americans if that were to transpire?
    Mr. Burt. In my testimony I spoke to two scenarios, so one 
of them is a base case, and one is a bear case. The base case 
looks like about a third, a quarter to a third of a global 
financial crisis. So, you know, reliving 2007 to 2012, and 
about 20 percent of American communities. The bear case looks 
more like a half of a global financial crisis, so not quite as 
damaging from a property value perspective, as the global 
financial crisis that was very broad-based, reckless lending 
practices, touched every region in the country.
    Whereas these climate perils only reach 20 to 25 percent 
for now. There's so many other things related to these 
challenges that go beyond just property evaluation, that I 
think is pretty clear. And there's so many. I mean I frame 
these scenarios pretty discretely around some reasonably well 
researched scenarios. There are so many unknowns about what 
could happen if you pass certain tipping points around climate.
    I mean I think I really have just established a couple 
guardrails, but I think the real systemic risks come from all 
of these other downstream impacts, not just related to these 
insurance market resets.
    Yeah, in the last 30 years we've seen about one and a half 
degrees of warming, and we've seen what that's done to wildfire 
damages. The next 30 years in this very constructive, 
optimistic RCP 4.5 scenarios, there's another one and a half 
degrees of warming. And if you start pushing into some of these 
more bearish scenarios it could be twice as bad as the last 30 
years of increases.
    So it's a really troubling outlook, and just the 
disturbances to everyday life go far beyond some of the things 
that I've researched, or even included in the testimony.
    Chairman Whitehouse. So to be clear you're base case 
scenario and your bear case scenario both include coastal 
flooding as well as upland flooding?
    Mr. Burt. Yes. We definitely do.
    Chairman Whitehouse. Okay. That helps to clarify Mr. Burt. 
And again, that's they both seem to be repricing at the same 
time. Markets are very good about sorting out issues that 
they're understanding and pricing, and allowing those issues to 
resolve for the good of the population. These issues are not 
well priced at all, so the big mispricing exists both in 
flooding and both in wildfire. Different reasons. The repricing 
seems to be underway.
    Chairman Whitehouse. Prudence should be our watch word it 
seems.
    Mr. Burt. I like that.
    Chairman Whitehouse. With that I will conclude the hearing. 
I want to thank the witnesses for appearing. I want to 
particularly thank Commissioner Serna, as a government 
official, for coming here to tell the story of her county and 
her experience in New Mexico.
    And I want to thank Senator Padilla and Senator Lujan for 
recommending witnesses to us. The full written statements that 
each of you provided will be included in the record. For my 
colleagues, questions for the record are due by noon tomorrow, 
with signed hard copies delivered to the committee clerk in 
Dirksen 624, or emailed.
    And if we get more questions for the record, if we could 
ask all of the witnesses to try to respond within seven days of 
us getting those questions to you. That would be appreciated, 
and with no further business, the hearing is adjourned.
    [Whereupon, at 11:50 a.m.,Wednesday, March 8, 2023, the 
hearing was adjourned.]
[GRAPHICS NOT AVAILABLE IN TIFF FORMAT]

                             [all]