[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]