Douglas-fir plantations in Western Oregon face steep economic penalties under rising wildfire threats, with land value falling from $14,104 to $6,414 per hectare—a 55% drop—when wildfire risk increases from none to high. At the same time, the optimal harvest age shortens from 65 to 24 years to reduce exposure to losses. These results stem from a reservation price model integrating stochastic timber prices, wildfire risk, and carbon pricing, according to a study by Oregon State University.

When wildfire probability is modeled as age-dependent, the financial impact intensifies. Land values decline to $5,815 per hectare even without fire, due to risk accumulation in older stands. Under high age-related fire risk, land values can rebound to $9,261 per hectare—provided salvage operations recover 70% of timber value. In these cases, harvest timing shifts to around 46 years, later than the 24-year horizon under constant risk.

The study simulates 81 scenarios combining timber price variation, carbon pricing ($15 to $35 per ton CO₂e), and salvage efficiency (30% to 70%). At higher carbon prices, rotation ages extend by up to 10 years, offsetting some wildfire-driven losses. However, under severe fire risk, the benefits of carbon pricing are constrained, pushing landowners to harvest earlier to avoid total stand loss.

Salvage efficiency plays a critical role in mitigating economic damage. When salvageable timber increases from 30% to 70%, land values under constant high risk improve from $5,879 to $6,414 per hectare. Similarly, under age-dependent high risk, land values rise from $9,124 to $9,261 per hectare, and mean harvest age extends from 44 to 46 years.

Forest owners adjust harvest timing not only based on direct damage but also on the perceived likelihood of wildfire. The reservation price—the minimum acceptable timber price to harvest—increases sharply with higher salvage rates and carbon retention in long-lived wood products.

The authors recommend wildfire-adjusted forest management strategies that combine fuel reduction, improved salvage incentives, and integration of fire risk into carbon markets to maintain long-term economic viability. These findings come from a preprint study by Oregon State University researchers Hsu Y. Kyaw, Andres L. Susaeta, and Mindy S. Crandall​.