Cited in Bloomberg Businessweek:

The question that may be most politically fraught is whether it’s appropriate to keep building in the most fire-prone areas as climate change gets worse. “At some point, you certainly have to consider encouraging people to move,” says R.J. Lehmann, director of insurance policy for the R Street Institute, which advocates market-based solutions for climate change. Yet California’s housing crisis means the state needs more homes, not fewer. So any policy aimed at discouraging homes in the forest should include pushing cities to allow for greater density. “I don’t think zoning is usually thought of as a wildfire issue, but it certainly can be,” he says. “Those two things have to go hand in hand.”

In theory, a market solution would come from the insurance industry. Mark Ghilarducci, director of the California Governor’s Office of Emergency Services, says that if the state left it up to insurers to determine rates in fire-prone areas, people wouldn’t be able to afford coverage. But Lehmann says California goes too far in the other direction, preventing insurers from raising rates based on projected future losses from worsening wildfires. Nor can insurers take into account the rising costs of reinsurance, another indicator that risks are increasing.

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