Cost Effectiveness Analysis for this Dissertation

Considering the fact that preventative mitigation planning is blind to house value and that the threat of wildfire to WUI structures includes a threat to human life, CEA is a good alternative to CBA for this dissertation. It removes the valuation debate that can be used to refute a standard CBA. The following section describes how the CEA will be

presented.

Cost Effectiveness Reporting

The CEA reporting options include cost/effectiveness ratios, effectiveness/cost ratios, total effectiveness, and cost effectiveness beyond a minimum threshold. Ratios and cost-effectiveness (CE) frontiers are common reporting techniques for the CE tool (Levin and McEwan 2001). Researchers reporting CE ratios have the benefit of removing scale from the comparison; once the highest cost to effectiveness ratio is selected the most cost effective scale for an option(s) can be identified. On the other hand, a CE chart shows effectiveness levels across the spectrum of mitigation costs. Both CE ratios and charts representing the various CE points are reported in this dissertation for the CEA

comparison between the HIZ and the silvicultural suites. However, curves are not generated to connect these points because this is not a marginal analysis. In other words, the sub-optimal solutions represented by each point on the charts are not part of a linear set of possible options. In order to show these curves the analyst would need the ability to scale options up or down by marginally adjusting the budgets. This would require an expanded optimization analysis, which is beyond the scope of this demonstration.

The cost effectiveness of each of the budgets is first reported by revealing the independent impacts to the SIAM and SIMPPLLE results. Next, the impacts on the modeling system estimated 30-year hazard results for each mitigation option are

analyzed. Figure 1 shows how each of the two mitigation suites are analyzed at the seven investment levels by holding the other factor constant at the level used to calculate the existing hazard (ceteris paribus). This assignment of HIZ mitigation budgets to MAGIS for treatment regime scheduling facilitates an effectiveness comparison with the

simplified goal of WUI structure protection from wildfire. While other protection goals may also be considered desirable information useful in the selection of mitigation options (e.g., timber values, infrastructure, recreational developments, and specialized wildlife habitat may all warrant protection), they are not considered in this pioneering effort.

Methodological Summary

Now that the modeling tools and the data used have been introduced, a methodological summary should help the reader evaluate how well the modeling system reflects the wildfire caused structure ignition phenomenon and economic analysis of the two suites of mitigation options. This dissertation first explains how an average 30-year existing ignition hazard is estimated for the 291 study area homes by combining results from a deterministic structure ignition assessment model (SIAM) with a stochastic ecological disturbance process prediction model (SIMPPLLE), which calculates wildfire

probabilities across the landscape. It then explains how a cost effectiveness analysis is conducted comparing options to reduce the average probability of structure ignition when wildfire threatens WUI homes. It follows advice from Finney (2005:98), who suggested using a quantitative definition of fire risk to evaluate the net value change from

uncontrolled wildfires. He listed two main factors: fire behavior probabilities and fire effects applying to a specific geographic area and time period with the following equation:

Expected [net value change] = Σ^Ni=1Σ^Nj=1 p(F_i)[B_ij-L_ij],

where p(F_i) is defined as the probability of the ith fire behavior and B_ij and L_ij are the benefits and losses afforded the jth value received from the ith fire behavior.

The effectiveness of two suites of mitigation options, given the objective function of minimizing the 30-year average structure ignition hazard across the study area is then evaluated. The modeling tools are rerun independently to evaluate treatment

effectiveness, where treatment effectiveness is defined as the predicted reduction in the average 30-year wildfire-caused structure ignition hazard across the 291 structures in the study area. Changes to anticipated home ignition hazard expectations are evaluated under the two following suites of options.

In the first suite, Firewise treatment options within the home ignition zone are building upgrades and the removal of fuels and subsequent replacement with non-flammable alternatives. For example, one treatment combines upgrading to nonflammable siding with the removal of grasses and replacement with a watered lawn. The costs of these treatments, as estimated by the author through consultation with local contractors who

operate in the study area, serve as the baseline budgets for cost effectiveness comparisons.

In the second suite, silvicultural forest treatments include a mix of various prescriptions actually being proposed by the local management unit in the area. These silvicultural treatments are scheduled during three decades with the Multiple Resource Analysis GIS (MAGIS) software based on the ratios of expected hazard reduction and discounted net cost/revenue per acre. For example, a restoration treatment thins the existing stand to a 50 ft²/acre residual basal area and follows this thinning with two broadcast burns. There is also a thinning-from-below to moderate density (100 ft²/acre residual basal area), an ecosystem thinning with a seven-inch diameter limit, and an ecosystem management prescribed burning only.

By taking budgets ascribed to each of seven Firewise mitigation options inside the HIZs across the study area (modeled using SIAM) and applying them through MAGIS

silvicultural scheduling software to the SIMPPLLE model (similar to past work by Jones and Chew (1999)), a direct cost effectiveness comparison is possible. The effectiveness of reducing average structure ignition potential for the next 30 years is charted against cost for all options to generate a cost effectiveness chart consisting of points that indicate achievable effectiveness at seven budget levels. Cost effectiveness ratios and this chart are the basis for a cost-effectiveness comparison using a simplified definition of

effectiveness³³. This research differs slightly from Finney’s conceptual approach (2005)

33 Note each house is assumed to have equal value due to uncertainty about contents and social equity considerations.

because economic effects are restricted to structure losses from probable wildfires. In addition, it differs from his approach because the current hazard and potentially attainable improved conditions are assessments of the hazard of any type of wildfire encountering homes valued equally. With future work the analysis can eventually be populated with additional economic values that describe a more complete set of land management objectives and protection priorities. The next two chapters present the results and discuss modeling system limitations.