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After the Wildfires, Question of Who Pays Keeps Burning

Amy Brown headshotWords by Amy Brown
Energy & Environment
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California’s wildfire season may be behind it now, but the recovery from the 2018 wildfires, the most devastating on record, is far from over. Last week President Trump threatened to cut off federal emergency aid to California for the continued recovery. And this week, the CEO of California power company PG&E is stepping down as the company faces massive liabilities related to the deadly fires. The worst of the fires is over, but the situation is far from cooling down.

PG&E CEO Geisha Williams has stepped down as the company faces billions of dollars in potential liabilities related to deadly wildfires, the company said on Sunday. PG&E acknowledged in a regulatory filing in November that it could face “significant liability” in excess of its insurance coverage if its equipment was found to have caused last year’s Camp Fire in Northern California, which claimed 85 lives. Reuters reported earlier this week that PG&E was talking to banks about multimillion dollar bankruptcy financing.

PG&E said Monday it sees bankruptcy as the “only viable option” for an estimated $30 billion liability for damages from the two years of wildfires, a sum that would exceed its insurance and assets. But as reported in The New York Times, PG&E’s predicament could be an early indicator of a wider economic toll from climate change, which is making wildfires more frequent and destructive.

Who pays? Not Trump.


The question remains, who pays for climate-related natural disasters like the California wildfires? According to the Times article, energy experts said PG&E’s intention to file for bankruptcy was one of the first major financial casualties from climate change — and far from the last.

President Trump doesn’t want the federal government to pay. There is still no clarity on his announcement last week, without evidence, that the state would not need the funds if the forests were properly managed. This has been refuted by scientists and fire officials who say that climate change, not forest management, is to blame for the California wildfires.

In fact, the Fourth National Climate Assessment issued by Trump’s administration in November 2018 predicted increasing wildfires due to climate change. The scientists concluded that by the middle of this century, the annual area burned in the U.S. could increase two to six times from the present.

Forestry industry on alert


All of these events weigh heavily on the mind of John Andersen, Forest Policy Director with the Mendocino Redwood Company (MRC) and Humboldt Redwood Company (HRC). Since 2011 the forestry company has provided 100 percent of the framing lumber sold in 40 Bay Area Home Depot stores, all of it certified by the Forest Stewardship Council (FSC) as required by Home Depot’s wood purchasing policy.

“In the state of California, we have certainly seen wildfires intensify unlike anything we’ve seen before,” Andersen told TriplePundit. “We have a lot invested in this land. Forestry is a very long-term commitment and fire is a great concern to protecting that investment.”

A total of 1.6 million acres burned in the 2018 wildfires, more than in the past decade. The combination of the all too frequent wildfires and drought amplified by climate change poses a growing threat to California's forests.

Andersen said the approximately 440,000 acres of redwood and Douglas-fir timberlands along the north coast of California owned by MRC and HRC were not affected by the 2018 wildfires but added “we have had repeated incidences of wildfires on our land, going back to 2008.”

He said MRC and HRC are actively managing the land to minimize the danger and impact of wildfires, thinning out forests and creating fuel breaks, a gap in vegetation or other combustible material that acts as a barrier to slow or stop the progress of a wildfire. Such practices he said are common for the “vast majority of forestry land in California, which is owned by families who have a long-term vision for their lands.”

Home Depot depends on California redwoods


For Home Depot, which sources 94 percent of its wood from North America, and depends on MRC and HRC for its Bay Area supply of lumber, there is a lot at stake in ensuring that forests remain as resilient as possible in the face of increasing wildfires. None of its supply of redwood was affected by the fires, according to a company spokeperson.

Home Depot, the nation's largest home improvement retailer, stopped selling wood from environmentally endangered areas in 2000 following protests by the San Francisco-based Rainforest Action Network and other environmental groups for its sourcing of old growth wood. Since then, it has positioned itself as industry leader in sustainable wood practices. North American forests are critical to its business and they’ve been increasing in size steadily. As Home Depot notes, North American forests have grown by 18 million acres since 1990.

Keeping those forests intact and safe from wildfires is top of mind not just for forestry companies and retailers like Home Depot but more urgently for those Californians who live with the prospect of fires that grow ever more dangerous.

The question of who pays will burn with equal intensity.

Image credit: U.S. Forest Service/Flickr

Amy Brown headshotAmy Brown

Based in southwest Florida, Amy has written about sustainability and the Triple Bottom Line for over 20 years, specializing in sustainability reporting, policy papers and research reports for multinational clients in pharmaceuticals, consumer goods, ICT, tourism and other sectors. She also writes for Ethical Corporation and is a contributor to Creating a Culture of Integrity: Business Ethics for the 21st Century. Connect with Amy on LinkedIn.

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