Wildfires are expensive: Stop making Oregonians pay the bill

Across Oregon, the flames from more than 2,000 fires this season have engulfed homes, ravaged landscapes and emitted dangerous levels of particulate matter, while burning through state budgets to rack up a large tab for taxpayers.

Oregon’s current approach to wildfire budgeting is inherently incompatible with the level of risk it faces in a changing climate. In fact, the damages – hundreds of thousands of acres burned, dozens of homes and other structures destroyed – are only likely to get worse. The solution?

A carbon price.

Making polluters pay corrects a long-standing market inefficiency, shifting the burden of wildfire costs from the shoulders of taxpayers back on to the responsible party: large carbon emitters. Plenty of evidence shows that the carbon emissions from burning fossil fuels are driving climate change, which, in turn, is causing more extreme weather and more extreme wildfires.

In Oregon, modestly pricing the carbon emissions that largely responsible for our changing climate – and worse wildfire seasons – could generate an additional $3 billion annually, providing ample resources to fund the state’s wildfire response efforts, offer direct loans for community, infrastructure and landscape recovery, and significantly boost investments in wildfire prevention and resilience.

And we’re going to need it all.

On Sept. 26, Oregon’s legislative Emergency Board approved $47.5 million in emergency funding for the Oregon Department of Forestry to pay for this wildfire season.

With climate change, Oregon will continue to face a severe wildfire risk, experts say. Yet the state’s current practice of mopping up wildfire costs after the fact is inefficient at best and consistently fails to account for the true costs of worsening wildfire in the warming world.

Wildfire doesn’t bend to the will of the budget writers in Salem. The Emergency Board plays a tenuous role doling out funds to keep Oregon’s agencies afloat. This year, when the forestry department’s initial budget ran out, wildfires burned on. They faced financial tumult: insolvency by November, with more costs to come, according to a legislative analysis. Protecting Oregonians by approving this round of emergency funding was critical, but as we anticipate the next “record-setting” wildfire season, the continued use of stop-gap expenditures as a makeshift solution levies an unsustainable burden on the state’s budget and, by default, on Oregon taxpayers.

Oregonians are all too familiar with the impacts of wildfire: skyrocketing home insurance premiums; countless acres of forest, grasses and croplands burned to a crisp; homes and communities devastated by flames; lives lost. Despite their best efforts to protect themselves and their property, individual action can only go so far.

And costs have continued to rise. Since 1992, annual average wildfire damages have doubled, then tripled, then quadrupled. Before this summer, 2020 was considered the worst wildfire year on record: burning more than 1 million acres, destroying 5,000 homes and businesses and killing nine.

The 2024 season is worse in terms of acreage burned, scorching nearly 2 million acres. So far, the department of forestry has spent more than double its budget for fire protection this year, effectively subsidizing polluters’ emissions to the tune of $250 million.

Oregon’s budget is uniquely constrained by a kicker law that limits the state’s ability to hold “additional” revenues for a rainy day. Like other states, many of Oregon’s essential services are already facing budget shortfalls, leaving little wiggle room for wildfire costs.

It’s clear the state needs a new, reliable source of wildfire funding.

Oregon isn’t alone in this quandary. Governments play a critical role in addressing market failures and protecting constituents from unexpected costs. Now they are flailing to cover the many costs that stem from decades of unmitigated, unpriced carbon emissions. Any economist can tell you that the solution is simple: Put a price on the problem.

Legislators have proposed a handful of tax adjustments, including a uniform property tax and an acreage-based tax on private timber harvests. But they’re missing the mark. The additional revenue generated by these proposals would barely cover half of the department of forestry’s emergency funding request, and they’re pointing fingers at the wrong industry. Neither trees, nor property owners, are at fault here. Polluters are and they should be on the hook for the bill.

Pricing the upstream, direct emissions of the state’s largest emitters (think natural gas processing facilities, large industrial plants, etc.) would not only raise the necessary funds but would minimize the welfare impacts felt by Oregonians. Targeted exemptions for critical industries and providing direct assistance to low-income, disadvantaged groups would further negate the strain on consumers.

This is not a new concept for Oregon lawmakers who have discussed, but failed to pass, several bills on the topic over the years. Though politically challenging, putting a price on carbon emissions would be an effective and efficient way to cover the increasing costs of wildfire associated with human-caused climate change.

Further inaction by Gov. Tina Kotek and state legislators willput Oregonians in harm’s way and drain the state budget and is no longer acceptable.

A carbon price wouldn’t stop the world from warming. It’s too late for that. Climate change is here, it’s impacting Oregonians – their homes, their land, their lives – and it’s expensive. Adopting a carbon tax could alleviate Oregon’s wildfire funding woes, set the stage for better budgeting and ensure a safer, more resilient Oregon for years to come by making the polluters pay.

Natalie Whitesel is pursuing a master’s in public policy at the Harvard Kennedy School at Harvard University and holds a John F. Kennedy Memorial Fellowship. She recently finished a Michael S. Dukakis Governors’ Summer Fellowship Program, working on Oregon Gov. Tina Kotek’s natural resources policy team. She has also worked as a legislative assistant at the Washington state House and, separately, organized local, county and state political campaigns.