Socioeconomic Impacts Of Forest Fires Upon Forestry Sector

Recent forest fire has increased and resulted in several consequences over the countries. As a result, it would be important to examine the implications of forest fire activity in terms of the socioeconomic dynamics and performance of the agroforestry sectors. By Vítor João Pereira Domingues Martinho,Polytechnic Institute of Viseu (IPV) and University of Trás-os-Montes and Alto Douro (UTAD)


Forest fires and their consequences came to be in several countries such as Portugal as a result of a set of factors related to the social, economic, environmental and natural contexts, which create favorable conditions or environments for these occurrences. 


They are realities towards which everyone may contribute, in some way, in order to mitigate them. In fact, damage caused by forest fires has increased over the last few decades across the globe.


In these frameworks, the scientific community may and should bring contributions, namely through new approaches and insights that allow for the prevention of the negative consequences from forest fires and allow us to understand the several impacts after their occurrence. 


Computational modelling, for example, brings new approaches for forest fire assessment, namely because it allows us to link several dimensions related with these multidisciplinary realities. 


Good assessments of the impacts of forest fires are important contributions to the design of adjusted agroforestry policies, specifically in order to direct support to the most negatively affected activities. 


Policy instruments and related legislation are determinant tools for reducing the negative impacts of forest fires.


Indeed, in international terms, agroforestry land inside and outside of Europe continues to burn, in some cases with more severity and frequency, namely due to climate change and global warming. 


On the other hand, governments and related institutions create (and disclose) more regulations than in the past. Maybe, new approaches are needed, where new technologies may play a determinant role. 


Multidisciplinary approaches could bring interesting contributions, for instance, economic analysis could transmit valuable insights.

These undesirable forest fires have always brought negative implications, however the impacts from these forest fires are not always equal across the several economic sectors. 


These realities appeal for more highlights about the real consequences of forest fires across the different economic activities and across geographic levels/locations.


In this context, the main objective of this study is to analyze the impact of verified forest fires in Portugal over the period of 2008–2015 on the socioeconomic dynamics of the agricultural (agriculture, farming, hunting, and related service activities), forestry (forestry and forest exploration) and economic sectors. 


For this purpose, we considered data from Statistics Portugal that was disaggregated at the municipality level for both output (gross value added) and employment (employed persons) from the business sector.


In other words, with this study, it is intended to investigate if forest fires reduce or increase agroforestry output and employment across Portuguese municipalities, over recent years, bringing insights for several stakeholders, namely for policymakers (both Portuguese and from the European Union), researchers and economic agents. 


The findings presented in this study will be another contribution for the policymakers to establish priorities in the design of forest fire regulations and for the perceptions of the economic agents about the socioeconomic implications from the wildfires. 


Considering these objectives, this analysis was based on Keynesian and convergence theories and the statistical information was analyzed through panel data. For the regressions, we considered the developments and the procedures proposed by Islam, Torres-Reyna and Stata. 


In each case, more adjusted methodologies were considered, taking into account the results for tests relating, namely, to heteroscedasticity and autocorrelation.


Literature Insights On Consequences Of Forest Fire

In countries like Portugal and Spain, recent years have shown that the consequences of forest fires may be dramatic, with an inclusive loss of human lives and firms. 


The implications of forest fire activity in the social and economic context in certain geographic regions is enormous and some areas will require several years for normality to be restored. 


In fact, the occurrence and severity of forest fires, as well as their relevant impact on various levels of human life, has become a concern for several stakeholders and policymakers in a variety of global locations.


The negative consequences of forest fires are, indeed, relevant across different areas of human life, inclusively affecting the normal conditions for human health. 


In some contexts, forest fires are the main agent of disturbances having a more random spatial spreading, making it more difficult to predict the consequences. 


One of the main challenges for national authorities in some countries is to predict the implications on human survival from forest fires in more isolated regions.


To mitigate the potentially devastating consequences of forest fires, prevention is especially important, in particular through the reduction of the available fuel load. 


However, it is also crucial to ensure that resources are immediately available for firefighting, and because some natural elements, such as changing winds, may render other existing factors irrelevant. 


Adjusted forest fire management with balanced prevention and suppression approaches are crucial to reduce the negative impacts of these agents on forest disturbance.


In some circumstances the resilience of certain plants may make all the difference in reducing the impacts of forest fires, namely in the new context of climate change. 


This question should be considered by the several agroforestry stakeholders, namely by policymakers, to design adjusted plans for forest management. In any case, the relationships between climate change, global warming and forest fires seem to be, in some cases, correlated.


During the post-fire period, it is important to quickly assess the implications as a means to readily promote adjusted policies that will reduce these negative impacts from fires and support a quick recovery of the socioeconomic contexts and affected ecosystems.


In any case, avoiding the occurrence of forest fires altogether seems to be the most important factor and prevention plays a fundamental role. Fuel load reduction is important, but it is also crucial to make an adjusted assessment of the risks and critical periods which contribute to forest fire occurrence.


Assessing The Effect Of Forest Fires

From the Keynesian theory, we drew from the Verdoorn and Kaldor’s developments, primarily those related to the Kaldor coefficient. 


The Kaldor coefficient, which we obtained from running regressions with employment growth as a function of output growth, captures the dynamic effects of economies of scale where we expect a coefficient value between 0 and 1, where values closer to 0 indicate stronger, increasing returns to scale. 


In this study, this relationship was enlarged using a variable related to forest fire severity (i.e., burnt area) as a way of assessing the effect of forest fires on the socioeconomic dynamics of the Portuguese municipalities. 


The enlargement of this Kaldor equation and its application for use in several economic sectors, including agricultural activities, has already been implemented in other work, such as Martinho. 


Indeed, the Verdoorn and Kaldor developments are increasingly relevant in the current global economic context and bring insight to both regional development, of labor contexts and the relationship between manufacturing and economic development.


In relation to the convergence theory, we considered the approaches related to absolute (unconditional) and conditional convergence. 


The idea behind absolute convergence is that all countries or regions tend to converge to the same steady-state of economic development (for example, gross domestic product per capita). 


In turn, the conditional convergence approach defends the notion that convergence is dependent on the condition/state of the countries or regions. 


In this case, countries with similar contexts (for example, similar capital human accumulation) can converge at the same steady-state, defending the existence of different steady-states and the concept of clubs of convergence, meaning groups of countries that converge to the same level of development. 


In general, the convergence trends in this theory are analyzed through determining the sigma convergence (measured through the coefficient of variation average standard deviation by the mean) and beta convergence (coefficient of regression, expected negative for convergence). 


In practice, the sigma convergence analyses, for a given variable, the tendency of convergence/divergence over a period of time and across the several municipalities (for the case presented in this study). If there is a decreasing/increasing trend, over the period considered, in the coefficient of variation there is convergence/divergence. 


The beta convergence reveals the annual rate of convergence. In this way, the convergence theory argues that the beta convergence (annual convergence) is necessary, but not sufficient to guarantee sigma convergence (convergence over the period). 


These concepts have several applications in current times. The implementation of approaches related to convergence theory in the agroforestry sector has been performed in several studies, for example, in Martinho and others.


Research On Forestry Business And Agroforestry Sectors

The research has shown that after 2011, there was continual growth in the agricultural business output (averaged across the Portuguese municipalities) after a relatively stable trend from 2008.


The average growth of the forestry business output reveals a decreasing trend until 2012 and a strong increase after 2013. 


It’s important to stress that these values for the output from the Portuguese agroforestry sectors were deflated with the consumer prices index disaggregated at NUTS (Nomenclature of territorial units for statistics) two level (the finest disaggregation available). 


We used the consumer price index from unprocessed food to deflate the municipality agricultural output and the consumer price index without housing to deflate the municipality forestry output.


Relative to agroforestry employment, the variable increased strongly after 2012 following a stable tendency from 2008. 


It seems that the Portuguese economic crisis had a positive effect on the agroforestry municipal dynamics, both in terms of output and employment. 


In fact, the agroforestry sector in Portugal has a great potential for growth, however, due to several factors, some of which are historic, sometimes this sector is forgotten about along with its potential for a more sustainable social, economic and environmental development. 


The creation of a common forest policy in the European Union interconnected with common agricultural policy could potentially bring about more interesting contributions for agroforestry performance.


The research also reveals that over the period 2008–2015, the years of 2010 and 2013 showed the greatest average burnt area. 


On the other hand, the years 2008 and 2014 showed the least severe average forest fire activity over the period in the Portuguese municipalities. 


As referred to before in the literature review, forest fire occurrences and severities have more of a time and spatial random distribution. 


This random behavior makes it more difficult to predict the forest fires’ occurrences and consequences.



Insights Into The Understanding Of Forest Fires

The objective of this study was to analyze the socioeconomic implications of forest fires in the Portuguese municipalities’ agroforestry business sectors over the period 2008–2015, by considering data from Statistics Portugal for output, employment, and burnt area. 


The statistical information was analyzed with panel data methodologies, namely those derived from Keynesian and convergence theories.


The data analysis shows that, in general, after 2011/2012, output and employment increased on average at a persistent trend in the agroforestry sectors of the Portuguese municipalities. 


The Portuguese economic crisis has also borne its influence here. In fact, some of the unemployment generated in other sectors, namely in the industry and construction, found solutions within the agroforestry sectors. 


On the other hand, over the period we considered, the trend for the average burnt area is essentially white noise, demonstrating neither an increasing or decreasing trend and showing the great irregularity in the impact of forest fires in the Portuguese context. 


The forest fires are agents of landscape disturbances with a great degree of unpredictability.


The Keynesian analysis, using the Verdoorn–Kaldor developments, reveals that there are strong increasing returns in the Portuguese agroforestry sectors, which are higher in the agricultural sector. 


These findings are in line with other works. On the other hand, considering the enlarged Kaldor equation, the burnt area logarithm positively influences employment growth in the agricultural sector and negatively influences the forestry sector. 


Forest fires seem to have a positive impact on the number of people employed in the Portuguese agricultural sector. The modernisation of the agricultural sector seen in recent years seems to have had a positive impact on the dynamics and performance of the sector, creating the right circumstances to absorb the workforce released by other diminishing sectors.


The convergence research, considering both the absolute and conditional approaches, was performed using the sigma and beta convergence concepts, following, for example, He et al. and Spirkova et al., and the sigma convergence shows signs of a convergence trend for forestry output and agricultural employment. 


The beta convergence analysis (coefficient of regression) shows that the convergence is more absolute than conditional, with the exception of agricultural employment convergence where, again, the burnt area logarithm (conditional variable) positively influences agricultural employment growth. 


On the other hand, burnt area growth is negatively influenced by forestry employment growth, showing the importance of increased forestry activities in forest fire prevention.


Additionally, it is worth noting the strong trends of agglomeration (strong increasing returns to scale from the Keynesian analysis) in the agricultural and forestry sectors over the period considered and across the Portuguese municipalities, showing that the Portuguese agroforestry activities became more concentrated in some municipalities in this period. 


On the other hand, there are signs of beta convergence (not as strong as the evidence of agglomeration) that are not enough to guarantee sigma convergence. 


In practice it seems that there are strong signs of divergence in the output and employment from the Portuguese agroforestry sectors, as well as in the burnt area. This may be a consequence of land abandonment and of desertification of the interior of Portugal.


The study presented here brings interesting insights into the understanding of forest fires, for policymakers and the perceptions of several stakeholders. It is important to bring new and multidisciplinary approaches for the forest fires contexts around the world, namely to improve regional resilience. 


For this it is important to increase economic dynamics in the rural area in a sustainable way, and to create more employment to attract younger people.


Political Implications

The need for more socioeconomic research relating to forest fires, for Portugal, has been identified in previous studies (as in, for example, Navalho et al. and the research presented here is aiming to contribute towards filling this gap.


Through the research above, we could get the conclusion that one should highlight that the impact of forest fires (burnt area) on the Portuguese agroforestry dynamics and performance seems too moderate. 


In fact, forest fires seem to improve agricultural employment with coefficients of around 0.069 (from the Keynesian approach) and 0.022 (form the convergence theory). 


On the other hand, forest fires show some evidence of reducing forestry employment, presenting a coefficient of −0.015 (from the Keynesian theory), though with a statistical significance at 10 percent. The impact on agroforestry output seems to be residual or negligible.


In terms of political implications, it is important to bring about more activities for the forestry sector in order to reduce the risk of forest fires and to improve the dynamics of this sector (the results show lower scale economies relative to the agricultural sector). 


On the other hand, it will be important to continue agricultural modernisation and its performance to better absorb the labor force released by other sectors. The creation of a common forest policy interconnected with a common agricultural policy, incorporating innovation and entrepreneurship strategies could be an interesting approach. 


To avoid desertification and land abandonment there should be a priority in the design of new policies. Considering the dimensions of the consequences of forest fires, the related policies must reconsider the relevance given to the socioeconomic impact on the agroforestry sector, where the negative impacts seem to be residual. 


In any case, the Portuguese agroforestry sector does have several problems, however, they are not a direct consequence of forest fires.


These insights open up new fields of research. In this way, for future studies, it will be important to understand the main factors which create the conditions for forest fires to inadvertently promote agricultural employment. 


Migration of the workforce from forestry to agriculture may provide an explanation. On the other hand, it will be interesting to further investigate the strong impact of the burnt area on agricultural employment, rather than agricultural output. 


Considering the negative socioeconomic implications of forest fires evidenced by the literature, it will also be important to identify the main factors that allow for negative impacts in the agroforestry sector from the Portuguese municipalities to be weak.


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