In the final days of 2021, the Marshall Fire ripped through Boulder County, Colorado, destroying hundreds of homes and businesses. The inferno was fed by months of drier and hotter-than-normal temperatures, caused by climate change, and spread quickly due to hurricane-force winds.

The fire was especially jarring because of its setting — suburban cul-de-sacs and built-up developments — and was perhaps best characterized, according to climate scientist Daniel Swain, as an “urban firestorm.”

Wildfires and other extreme weather events will continue to encroach into new areas and cause more damage, thanks to the burning of fossil fuels causing climate change. Meanwhile, new research indicates that markets have failed to incentivize people to take even minimal adaptation measures in the face of these growing risks.

That finding doesn’t necessarily come as a surprise: Over the past decade, Americans have migrated towards some of the areas most vulnerable to climate impacts. Such behaviors have come at steep cost: In 2021 alone, extreme weather events exacerbated by climate change caused more than $145 billion in damages nationwide, the third highest in history.

But a new study about wildfire building codes, published in the National Bureau of Economic Research (NBER), reveals that state-mandated mitigation measures may be even more effective at protecting people against climate risks than previously thought. Requiring climate adaptation, through policies such as building codes, would save property owners money as well protect their homes. Yet in the absence of mandates, people do not take these cost-saving measures voluntarily, the study found.

“A cost-benefit calculation implies that low takeup in the absence of standards is likely driven by market failures as opposed to a lack of cost-effectiveness,” wrote the study’s authors Patrick W. Baylis of the Vancouver School of Economics at the University of British Columbia and Judson Boomhower of the University of California, San Diego. “These facts can inform policies to mitigate other risks like floods, hurricanes, tornadoes, and heat waves, where voluntary takeup of adaptation investments also appears to be limited.”

These findings could have immediate implications for Colorado. State legislators intend to introduce a bill this spring to enact statewide building codes that make buildings less likely to ignite. In the wake of the Marshall Fire — the state’s most destructive on record, causing at least $1 billion in insured losses — lawmakers hope that people who previously opposed a statewide building code will come on board.

“We have a different context this year because of the Marshall Fire, and just as importantly, the largest forest wildfire season we’ve ever had. It has changed the political debate,” said state Sen. Chris Hansen (D), who intends to reintroduce statewide building code legislation in this spring’s session. “Local governments are focused on this in a way they weren’t before. Before there was a libertarian, ‘do what you’d like on your property [approach].’ But now I think people are seeing the collective risk is raised when you take that approach. It’s bad for the state, it’s bad for insurance rates, it makes things more dangerous for citizens.”

40 Percent Less Likely To Be Destroyed

Across the west, people have been moving into the wildland-urban interface for years, even as the climate crisis heightens the risk of living in those areas.

But only four states — California, Utah, Nevada, and Pennsylvania — have statewide building standards for wildfires, while a few more, including Colorado, have codes in some local jurisdictions.

California’s standards are the strictest, and were first developed after a 1991 fire in Oakland caused $1.5 billion in damage. The rules, which were strengthened in 2008, are mostly applicable only to new construction.

The NBER study was the first comprehensive evaluation of the effectiveness of those codes. The study’s authors compared the survival rate of homes that had faced identical wildfire exposures in California between 2003 and 2020, as well as factored in data from 11 counties outside the state.

The results were striking. “A 2008 or newer home is about 16 percentage points (40 percent) less likely to be destroyed than a 1990 home experiencing an identical wildfire exposure,” noted the study’s authors. “There is strong evidence that these effects are due to state and local building code changes — first after the deadly 1991 Oakland Firestorm, and again with the strengthening of wildfire codes in 2008.”

The study also found that the costs of complying with these new codes actually proved cheaper to homeowners than the cost of not adapting, because they were so effective in protecting properties from wildfires — both for homes built in alignment with the codes and their neighbors.

“The data show that an adaptation mandate substantially improved resilience to wildfires and a cost-benefit approximation suggests that low takeup without standards is more likely driven by market failures than by fully-informed individual decision making,” the authors concluded.

“A Compelling Set Of Facts”

These findings buttress the arguments of Colorado legislators attempting to pass a new statewide wildfire building code.

After the devastating 2012 wildfire season, which caused $538 million in losses, then-Gov. John Hickenlooper convened a task force to study fire mitigation measures. However, a legislative committee formed to review the resulting recommendations ultimately rejected a bill to pass a new statewide building code.

Opposition from construction and real estate groups played a role in killing the legislation, said Lisa Dale, a lecturer in sustainable development at Columbia University who sat on the Colorado task force as a policy advisor for the state Department of Natural Resources.

According to Dale, interest groups often argue the costs of updating building codes for new construction outweigh the potential benefits. That’s because while Dale believes such code updates are necessary, they only offer limited help compared to the scale of the problem. This challenge has been endemic to climate fights across the country: The problem is so big that no single policy will be adequate to prepare for the impacts of climate change.

“The vast majority of people who live in the West live in a wildfire risk zone,” Dale said. “We are not just talking about a few towns that are in the woods, we’re talking about two-thirds to three-quarters of all homes across the West that are subject to risks from wildfire. The scale of what we are facing is broad and deep, and any tool like building codes that only impact new construction in designated risk zones is going to have limited measurable outcomes.”

Dale also said homeowners associations supplied substantial opposition to the legislation, largely for aesthetic reasons.

“A lot of communities across the country are organized by homeowners associations,” she explained. “Many homeowners associations are driven by aesthetics and safety, so they want all of the houses in their development to look the same. What we found was that many of these homeowners associations are relying on decades-old guidelines regarding building materials that had all sorts of reasons for being developed at the time, and haven’t been updated and made current.”

The web of interest groups opposing just minor mitigation efforts in 2013 is once again popping up to oppose the new potential statewide building codes.

The Colorado Association of Homebuilders, whose membership includes construction companies as well as real estate companies, has argued that governments should educate homeowners about climate risks but not institute mandates. The group said its number-one goal for the 2021 legislative session was to “oppose efforts to expand code adoption beyond electric, plumbing and energy codes at the state level.”

“Market forces, such as the ability to obtain and retain insurance, are also powerful incentives for property owners to mitigate their risk,” Ted Leighty, CEO of the Colorado Association of Home Builders, told the Colorado Sun last October about the proposed legislation. “One of the most important roles of state and local governments is to provide resources to help educate homeowners about how to mitigate risk through defensible spaces and hardening of structures.”

Leighty’s comments are undermined by the findings of the NBER paper, which found that publicizing information about climate risk has not been enough to encourage people to build homes that have a better chance at withstanding fires.

But Hansen, who plans to introduce the legislation, thinks the tables are turning. Not only are Coloradans more concerned about property damage from wildfires than they were a decade ago, especially in the wake of the Marshall Fire, but Hansen says abstract conversations about climate now often include concrete budgetary questions.

“You have a subset of voters who are very worried about climate change, that argument has been made and won with that subset of voters,” Hansen told The Daily Poster. “But there is a much bigger chunk of the electorate that doesn’t think climate is a big threat, but cares very much about insurance rates, local fire protection, and those types of issues. And so I think we are in a stronger position to pass this legislation because we have a compelling set of facts and a compelling argument with a bigger chunk of voters.”

Colorado is losing out on federal money for wildfire mitigation, due to its lack of a statewide code. The Federal Emergency Management Agency distributes grants for disaster mitigation to states based on a number of criteria, one of which is whether the state has a minimum building code.

“One of the angles that is different this time is that we are really looking at this from a budgetary standpoint,” Hansen told The Daily Poster. “We have missed out on tens of millions of dollars in federal grants that we otherwise would have had a good chance of getting. That means we’ve really got to fix this, from a budget standpoint, because there just aren’t enough resources at the state level to do this by ourselves.”

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