The economic benefits of prescribed burning across Australia

Prescribed burning provides substantial and documented economic benefits across Australia by reducing the severity, extent and cost of bushfires. Severe bushfires impose enormous economic costs that far exceed the cost of prescribed burning and current national spending patterns remain heavily skewed toward post‑disaster response. With the Productivity Commission identifying that "97% of disaster expenditure in Australia occurs after events, with only 3% invested in mitigation," this review argues that this imbalance drives escalating suppression costs, repeat disasters, rising insurance premiums and budget volatility. The review integrates evidence from the USA, demonstrating parallel economic, ecological and social benefits of proactive fuel management.

Economic benefits of prescribed burning

Prescribed burning reduces suppression expenditure, protects infrastructure, supports agriculture and forestry, reduces health impacts, better protects water catchments and stabilises carbon budgets. The 2019–20 Australian bushfires illustrate the scale of avoidable losses, with estimates ranging from $20 billion to AccuWeather's $110 billion assessment. Repeat bushfire disasters highlight the consequences of under‑investment in mitigation.

Avoided wildfire costs in Australia and the USA

I have produced a review which review synthesises findings from Hjerpe et al. (2024, 2026) and finds that forest‑restoration and fuel‑reduction treatments deliver avoided cost benefits in the US. Avoided wildfire costs dominate the economic return, particularly in the built environment, ecosystem services and suppression‑cost reductions.

Direct avoided costs include reduced smoke‑related health impacts, lower structural and infrastructure losses, reduced carbon emissions, protection of timber assets, species and habitat conservation, and reduced rehabilitation costs. Indirect avoided costs include reduced post‑fire flood damages to homes, infrastructure and water systems, and reduced fatalities and injuries from post‑fire floods and mudslides. The listing in Hjerpe et al. (2026) is very similar for Australia in terms of avoided bushfire/ wildfire cost benefits.

Enhanced ecosystem services

Hjerpe et al. (2026) identify seven enhanced ecosystem services generated by thinning and prescribed fire, including increased water yield, improved recreation values, higher non‑use values, increased property values, greater access to non‑timber forest products and improved forest resistance to drought and beetle infestation.

Budget savings

Prescribed burning reduces long‑term suppression costs, protects timber assets and supports rural economies. The review stresses that governments are missing opportunities for coordinated, cross‑tenure mitigation programs that would deliver economies of scale.

Florec and Pannell (2016) and the Menzies Research Centre (2020) provide strong evidence that mitigation delivers large fiscal returns. The latter estimates that "$5.3 billion invested in mitigation between 2020 and 2050 could deliver… $12.2 billion in government budget savings," potentially cutting disaster response expenditure by more than half.

Current annual Commonwealth mitigation funding of $200 million is extremely low and incapable of addressing systemic mitigation inadequacies. A complete overhaul of disaster funding is required, shifting from recovery‑dominant expenditure to proactive mitigation that reduces future suppression, recovery and bureaucratic costs. The review emphasises that large megafire related budget impacts will continue indefinitely unless governments dramatically increase mitigation investment.

Improved economic efficiencies in fire management

Evidence from Australia and the USA shows that mitigation consistently outperforms suppression‑dominant strategies. The Menzies Research Centre (2020) notes that "one dollar spent on mitigation can save at least two dollars in recovery costs." Western Australian studies show that prescribed burning delivers the strongest economic benefit in forested regions, while planning measures combined with burning reduce high‑hazard exposure in peri‑urban areas.

Some US case studies demonstrate even higher returns. The U.S. Chamber of Commerce and Allstate found that each dollar invested in disaster preparation saves $13 in avoided damage and cleanup.

Strabo et al. (2026) found that fuel treatments prevented $2.8 billion in damages across 11 western states, delivering $3.73 in benefits per dollar invested. UC Davis (2026) reported that treatments reduced burned area by 36%, prevented thousands of building losses and avoided major emissions and health impacts. Hjerpe et al. (2024) found returns up to 600% in high‑value watersheds.

Suppression efficiency, safety and cost effectiveness

Prescribed burning improves suppression effectiveness by moderating fire behaviour, reducing flame depth, slowing rate of spread and reducing spotting. It also reduces suppression force needs, shortens control time and provides tactical advantages such as anchor points, safer backburning zones and improved access and egress.

US examples reinforce these findings. The 2021 Dixie Fire cost nearly $700 million in suppression, with analysts noting that a fraction of that investment in thinning and burning could have prevented catastrophic outcomes. Strabo and Reime (2026) found that fuel treatments reduce federal firefighting expenditures by $5–$6 per dollar invested.

Consumer savings

Prescribed burning reduces insurance costs, emergency services levies and stamp duties by lowering disaster risk. Rising insurance premiums across Australia reflect escalating bushfire and flood losses. The review highlights the need for stronger accountability and more effective mitigation to stabilise household and business costs. Deloitte Access Economics (2013) identifies additional cost‑effective measures such as resilient housing (BCR 1.4), improved vegetation management (BCR 1.3) and undergrounding powerlines (BCR up to 3.1).

Cumulative benefits

Prescribed burning delivers multiple economic, ecological and social benefits. As AFAC (2021) notes, it is a vital land‑management tool that enhances ecosystem resilience, reduces disaster‑recovery needs, improves suppression efficiency and stabilises government budgets. The review concludes that Australia must shift decisively from reactive disaster spending to proactive, landscape‑scale mitigation to secure enduring economic, social and environmental returns.