When forest fires ravage hundreds of thousands of New Mexico acres, forcing evacuations and shuttering businesses, the economic impact on forest towns and surrounding areas is generally assessed only through the tax dollars spent on extinguishing the blaze.
Taxpayers spent a little less than $20 million, for example, on the Little Bear Fire in Ruidoso that destroyed hundreds of structures in 2012. And the Whitewater-Baldy Fire, the largest fire in recorded New Mexico history, cost around $23 million.
However, a January study from an Austin-based firm suggests that those costs don’t even scratch the surface when calculating the total economic impact of the New Mexico forest fire season, which is potentially going to be especially damaging this summer due to an intense drought and years of above-average temperatures.
The study, funded by an organization of forest-industry businesses, found that large New Mexico forest fires ignited since 2009 have cost the state as much as $1.5 billion, more than 12 times the cost of suppression alone and more than seven times what the state invested in Spaceport America.
The firm, Impact DataSource, considered damage to watersheds, impacts on tourism and lost income, destruction of property, public health costs and restoration expenses, in addition to others, in assessing the true cost of forest fires. The $1.5 billion is a midpoint estimate, as some forest fire costs can accrue over years, and others are more indirect. At the firm’s highest estimate, forest fires since 2009 could have cost 29 times more than suppression costs, roughly $3.4 billion.
Businesses in evacuated towns can lose huge amounts of revenue, still-standing homes in burned neighborhoods see property values plummet and local governments lose property taxes as homeowners rebuild, or if they move away.
And then there’s the economic impact from the forest itself: A damaged watershed can reduce profits for farmers or other downstream businesses, and scorched timber is worthless.
Brent Racher, president of the New Mexico Forest Industry Association, said New Mexico legislators who saw the report during the 2013 legislative session began to appreciate another aspect of the forest fire risk, one apart from the difficult-to-quantify environmental and aesthetic damage.
“Adding to that the full cost of the forest fire really blew people away,” Racher said. “Our legislators easily grasped that it was much larger than that.”
Racher said the forest-industry businesses funded the study to encourage greater forest-thinning efforts that could prevent huge losses in acreage and dollars for years to come. The bill that included the report sought to incentivize the use of thinned trees for biofuels or other alternative energy sources.
That bill, Senate bill 204, passed the day before the session ended but ultimately died through a pocket veto, according to the New Mexico Legislature website.
— This article appeared on page C2 of the Albuquerque Journal