This policy playbook was published by the Frontier Institute with contributions from PERC.
State leaders can expand proactive forest restoration and wildfire response capabilities by encouraging collaboration, reducing conflict, and leveraging strategic investments. Nearly 9 million acres in Montana face very high or high wildfire risks, but improving active management of forests to prevent catastrophic fires and improving response capabilities when fires do break out can reduce the harmful impacts to Montanans.
Reform #1 Actively Manage Forests With Prescribed Burns
Overgrown forests are a leading cause of catastrophic wildfires. The buildup of fuels, including brush, undergrowth, and small-diameter trees, leads to wildfires burning hotter, faster, and bigger when they start. Increasing active forest management, notably the use of timber harvest and prescribed burns, to clear out excess fuels is necessary to fix our forests.
With a third of all forests in the state on non-federal lands, Montana has the opportunity to increase the use of prescribed burns on private lands as a way to proactively reduce our wildfire risk and protect private lands as wildfires spread from other sources. Time and time again, when wildfires have spread to areas where prescribed burns have been applied those fires have become less destructive and easier to fight—especially when combined with mechanical thinning.
The good news is that Montana has an efficient prescribed burn permitting system and emphasizes the use of general permits to conduct a prescribed burn on private lands, while also forecasting burn days a week in advance.
The challenge, however, is that Montana does not have a clear standard for determining whether a landowner is liable for the damages of a prescribed fire that escapes, which seriously discourages the use of prescribed burns on private lands. Certainly, burners who do not responsibly administer burns must be held accountable for damages done, but significantly less than one percent of prescribed fires escape to cause damages–and most of the escaped burns only cause minor damage, such as burning a small area of neighboring forest or grassland.
Montana should clarify its prescribed burn liability standard and consider adopting a gross negligence standard which has been shown to significantly increase prescribed burn use. Additionally, a catastrophe bond should be created to help cover any potential damages when prescribed burns do escape.
Improve liability regimes to align private risk and public benefits of prescribed fire.
Despite the benefits of managing land with prescribed fire, many private landowners decline to adopt the practice due to fear of liability. Ordinarily, holding people liable for the harms they create works well to encourage responsible behavior and discourage carelessness by requiring people to internalize risks and costs imposed on others. In the prescribed burn context, however, it has produced closer to the opposite result. If landowners bear all of the costs and risks of prescribed fire while capturing only a portion of the benefits, they will likely decline to use the tool even when the total benefits far exceed the risks. Montana’s liability standard for prescribed fire is currently uncertain, making it even more difficult for landowners to understand their liability risk when conducting burns.
To improve the use of prescribed burns on private lands, the legislature should clarify the liability standard and also consider a gross negligence standard, which has been shown to boost prescribed fire use by 10 percent.
Utilize tools like catastrophe bonds.
While reducing landowners’ liability for escaped prescribed fires is essential to expanding use of the tool, shifting that risk to surrounding landowners and communities may undermine support for “good fire.” An innovative, market solution to this problem would be to use a catastrophe bond to cover damages in situations where a burner was not negligent. Catastrophe bonds are a widely used tool to reduce exposure to low-probability but high-cost events.
Investors would pay into the bond, which would generate financial returns through contributions from those who benefit from the reduced risk of wildfire through prescribed burns, including the state of Montana. The Department of Natural Resources and Conservation and the state legislature can encourage prescribed fire that reduces future fire suppression costs, threats to public property and infrastructure, and impacts to environmental resources by providing financial returns to catastrophe bond investors. Utilities and insurance providers might similarly benefit by reducing their exposure to wildfire-related liability. In exchange for reduced liability, prescribed burners could pay a fee on burn permits that would also fund bond returns.
Reform #2: Continue Leveraging Local Forest Management Resources
The Federal Government owns nearly 30 percent of the land in Montana, making them the largest forestlands manager in the state. The Montana Forest Action Plan identifies 3.8 million acres as the state’s highest priority for forest restoration work, 60 percent of which are on federal land. With limited resources and bureaucratic red tape, federal forest restoration projects have been met with severe delays, further contributing to the wildfire crisis.
Through the Good Neighbor Authority, the Montana Department of Natural Resources and Conservation is able to plan and implement forest restoration projects and address shared priorities on federal U.S. Forest Service and Bureau of Land Management lands in the state. Under the Good Neighbor agreement, Montana is able to use state procedures, personnel, and contracts to carry out activities such as thinning or administering prescribed burns and can sell timber harvested from federal forests. Revenue generated from timber sales is retained by the state and can be reinvested in future forest projects to get more work done on the ground. Montana has reached a position where these timber sales are generating enough revenue for the Good Neighbor program to be self-sustaining.
Continue to proactively seek out opportunities to expand Good neighbor Authority projects across federal forestland and identify projects with revenue-generating potential.
Montana currently has Good Neighbor agreements in place with both the U.S. Forest Service and the Bureau of Land Management. Since projects began in 2018, the Montana Department of Natural Resources and Conservation has eagerly put the agreements to use. The state has used GNA to treat 26,000 acres of forest lands with tools including timber harvest and prescribed burns. At least 37 timber sales and 39 restoration projects have been completed or under contract through GNA. As a result, over 83 million board feet of timber have been harvested, generating $14.3 million in revenue–making the program financially self-sufficient.
Montana has proven capable of scaling up forest management on federal lands through Good Neighbor Authority. While federal land agencies also need to increase active management of federal forests, the state should continue to pursue Good Neighbor Authority projects that promote forest health, reduce wildfire risk, and support the Montana timber industry. The state should also support federal reforms to make counties and tribes equal partners under Good Neighbor Authority.
Explore the possibility of charter forests in Montana.
A major challenge to increasing active forest management is the many bureaucratic hoops forest managers must jump through in order to make decisions. One approach that could build on the lessons learned of devolving management through Good Neighbor Authority is the creation of state charter forests. Similar to a charter schools approach, charter forests would remain under state ownership but would be managed by a board of accountable stakeholders. The state would maintain oversight, including setting broad land use goals and performance standards, but charter forest managers would have the flexibility to develop and implement innovative local solutions.
Montana could be the first state to pilot a charter forest management approach. A previous Republican presidential administration and an Idaho land reform committee have endorsed the concept of charter forests. To put the idea into practice, Montana should commission a study of how charter forests could be applied to improve the management of state forests.