A Bioeconomic Projection of Climate‐Induced Wildfire Risk in the Forest Sector

Under the influence of climate change, wildfire regimes are expected to intensify and expand to new areas, increasing threats to natural and socioeconomic assets. We explore the environmental and economic implications for the forest sector of climate-induced changes in wildfire regimes. To retain genericity while considering local determinants, we focus on the regional level and take Mediterranean France as an example. Coupling a bioeconomic forest sector model and a model of wildfire activity, we perform spatially explicit simulations under various levels of radiative forcing. By using a probabilistic framework, we also assess the propagation of several sources of uncertainty to the forest sector, considering both climate-induced uncertainty and the intrinsic stochasticity of the fire process. By the end of the century, summer burned areas increase by up to 55%, causing moderate losses of merchantable timber and forest carbon stocks, with cascading impacts for industrial activities and climate mitigation in the forest sector. Implications for industries remain limited, but we observe price increases, especially for softwoods, as well as spatially differentiated changes in producer welfare. Inter-annual fluctuations explain most of uncertainty in wildfire activity, but their impacts on the forest sector are quickly dampened. Over time, owing to the cumulative nature of wildfire impacts on forest resources, uncertainty related to climate warming, climate models' response and stochasticity intrinsic to the wildfire phenomenon strongly increase in relative importance. Results reassert the need to consider multiple futures in prospective assessments, including uncertainty inherent to natural processes, often omitted in large-scale economic assessments.mainte