No Priors 第98期｜与 Convective Capital 创始人 Bill Clerico 对谈

All of us, I think, have been pretty horrified by what's happening in L.A. right now with the big fire. Many of us are worried about friends who've lost homes and their possessions there. There have been a string of major fires in California and elsewhere.

So today, what we want to discuss on No Priors is what causes some of these fires, what technologies can intervene, and how we should think about these things more generally. We're recording this on Thursday, January 9, in the middle of the day, so obviously this is a situation that's unfolding hour by hour and may change by the time this comes out.

But we're very excited to have Bill Clerico joining us today on No Priors. Bill previously started a company called WePay, which he sold to JPMorgan, and he eventually left to start a fire-focused venture fund. He's been investing in different technologies, interventions, and approaches to deal with wildfires and other things.

I think both Sarah and I've known you for many years, and you've been a prominent member of the tech community. So welcome—welcome to No Priors today.

Thanks. Thanks for having me.

Maybe we should preface it by taking away the objection handling, because I feel like there are 2 things that people tend to blame these sorts of disasters on. One is that it's just climate change, there's nothing we can do, and it's impossible to intervene. The other approach is to say that, irrespective of climate—which could impact the frequency of storms or winds, or dryness for fires—we can still intervene in all sorts of ways.

At first, I'd love to hear your views on which of those dimensions you land on and how we should think about the conversation in general going forward.

Maybe this is a cop-out answer, but I think it's very much both. Certainly, longer, hotter, drier fire seasons are in part caused by climate change. That certainly exacerbates conditions for wildfire.

But the reason that wildfires really reached a crescendo in the last 10 years, in my opinion, is not because of climate change. It's because of things like forest management. It's because of the way we've constructed our electrical grid—more acute, self-inflicted wounds. I think those are the things that are much more immediately addressable.

Climate change is what it is. The climate's warming. Certainly, we want to blunt the effects of that over time, but I think we need to think about wildfire in that context. In that context, there's a lot of things that we can do to impact it.

Yeah, one of the things that fascinates me is that if you're a strong believer in climate change, then you should actually prepare even more, right? If you're assuming that there will be more events like this, then you should be building out the infrastructure even more aggressively.

It seems like the opposite has been happening, at least in the state of California and some nearby states, where similarly we've seen these giant fire outbreaks. I was hoping maybe we could start with just an understanding of what some of these contributing factors are besides climate, how we should think about them, and how things have changed over the last few decades in terms of what people have done about them.

Happy to go there. Maybe what I'll say real quickly first, though, is that I think even in the climate investing realm, there are some big changes happening. If you look at climate capital that's deployed, 98% of it goes into what's called mitigation, so reducing CO₂. 2% of it goes into resilience and adaptation.

What we are seeing is the pendulum on that swinging rapidly. Now, I think climate and climate investing is very much starting to be inclusive of resilience and adaptation. I think that's a good thing, and I think it acknowledges the reality. Sure, we should emit less carbon—that would be great—but we need to deal with everything that's been emitted and with the changing climate. I think that's a very positive thing.

To your question about what else is causing wildfire, I look at it as a couple of factors. The first, and in my opinion the most important one, is that fuel density, or forest density, has increased 3 times in the last 100 years.

Starting in the 1930s, the U.S. Forest Service implemented a policy of what they called maximum suppression. They rolled out this very famous 10 a.m. policy, which meant that when you heard about a wildfire, it had to be out by 10 a.m. the next morning. That was very well-intended. It was intended to protect timber, protect towns and cities, and prevent things from getting too big.

For a long time, it worked fairly well. You put the fire out quickly, and you're good to go. But what happened was that these forests, which had regularly burned prior to that with high-frequency but low-severity fires, just got denser and denser and denser.

Today, they're probably at least 3 times denser than they were around the turn of the century. In many places, they're far denser than that. Then you layer on top of that the fact that they're dry, the weather's hotter, and all of that as well.

We've made very little progress in undoing that. If anything, they continue to get denser because we have—or still have—this policy of maximum suppression. If we want to undo that density, we need to take it really seriously.

There are really 2 ways to do that. The first is prescribed fire, which is basically using fire itself, under a very prescribed set of conditions, to burn these fuels and get them off the landscape. Essentially, it's lighting fires in the spring instead of in the summer and managing them.

The second is timber harvesting, or what they call mechanical thinning, which is basically cutting trees down. Both of those things are incredibly important, but they've been made incredibly difficult by the way we govern ourselves. They're both actually quite unpopular.

I don't think it's quite as simple as saying that a single politician has done it. No one wants a prescribed burn next to their house. No one wants a smoky weekend to ruin their weekend in Tahoe. There are some really big cultural changes to make.

I thought there were other things related to what you're saying as well, in terms of, for example, if there's a higher density of fallen trees and wood that's been accumulating that you're not allowed to haul off your own land. I thought there were other policy and regulatory issues that impact aspects of both forest density and fuel availability for fires, conditions for fires to start, and things like that, in addition to everything that you're saying as well.

For sure. As an example, I own 170 acres of timber. It's Douglas fir and redwood timber. Sarah's been there. I wanted to do treatment on that land. It hadn't been treated in a long time, and we wanted to log parts of it with a conservation strategy.

It took 3 years and an enormous amount of money, including all kinds of crazy loopholes. We had to—I had to—hire a contract biologist to come to this property, which is out in the middle of nowhere, 6 times over the course of 2 years to call for the northern spotted owl.

I think we have this very well-intended environmental regulation and policy, but over the decades it's become this morass of regulations, which makes it really hard to do that. No one has really stepped back and said, “Okay, what's more important to us: northern spotted owl habitat or incinerating our forests and our towns and cities? Can we make a rational trade-off?”

We probably can't have them both. Or we probably could, to be honest, but the way the regulations are set, we can't. There are some really obvious things like that that just introduce red tape. When you introduce red tape, it adds expense, it slows things down, and it doesn't happen. It doesn't get done.

It's funny. I looked up some of the numbers on this, and apparently, for higher-risk forests needing prescribed burns, it takes an average of 4.7 years to get through environmental reviews for simple projects and 7.5 years or so for more complex projects.

Basically, you're waiting 4 to 7 years just to get through a review to be able to even thin something out. It's absolutely crazy. There are some lawsuits around this, right? A club, for example, sued the Forest Service in 2007 to prevent it from doing some sort of categorical exclusion for controlled burns for fuel reduction.

There is very active litigation and policy that I think has increased over time versus decreased, making this a much worse situation as well.

I think under a change in administration, it's pretty clear that there will be a more aggressive approach to getting some of these projects done, because right now it just doesn't work. The U.S. Forest Service—I saw a statistic—spends 40% of its budget, which is about $250 million a year, on planning, essentially dealing with this kind of stuff.

That's just totally unacceptable. It's a total misuse of taxpayer dollars. They have to because that's the way the laws are written, but we need to make those changes.

There's a piece of legislation right now in the House called the Fix Our Forests Act. It's a bipartisan piece of legislation. It brings together Bruce Westerman, who's the chair of the House Natural Resources Committee and a Republican from Arkansas, and folks from California. They're trying to fix forest and timber management and do permitting reform around it.

So I think there's a recognition that this needs to get addressed, but the current condition is laughable. It's a joke.

I guess the regulatory problem here, or the policy problem, sits at the local and state level versus the federal level, because you described legislation and the Forest Service. There's a very open question right now as to how much of this is a California-specific issue.

There's a lot to unpack there. Maybe I'll start with just some stats. You probably didn't realize that there's wildfire in Florida, but there is. Florida does 2 to 3 million acres a year of prescribed burning. It's pretty amazing. They're one of the most advanced states when it comes to doing prescribed fire.

California set a goal this year—or last year—to do 100,000 acres. That was the goal. I'm pretty sure we fell short of that goal. We want to build our way up to, I think, a million acres over the course of the next decade. So there very much is a California problem.

Now, is that purely because of our politicians? I think that's part of it, but I do think that part of it is also cultural. Florida has been doing this for decades. Culturally, the state embraces it and accepts it. It's popular at the local levels, there's a workforce that's comfortable with it, and the public safety agencies are comfortable with it.

In California, we've really gotten very far away from it, and there's a deep fear of it. If you're a local burn boss or fire chief and you want to do a prescribed fire, it is the right thing to do, but it's kind of risky. If it escapes, if it burns someone's property, or if you start the next Palisades Fire, you're going to lose your job. This is where the risk outweighs the benefit in many cases, and we don't have the kind of cultural history or momentum here to just accept that.

I do think that California is pretty far behind and needs to catch up. I do think our forests are also different. The risk here is far different than in the Southeast, so there's good reason in part for that. But I do think part of it is also political will and having the right leaders who take this seriously.

How do you think about this issue in a context that's more urban, or something that crosses over between an urban and non-urban environment? The Palisades Fire is a great example, where there are a lot of hillsides that were densely populated with trees next to a city center. Similarly, what do you think about thinning things out and other approaches or aspects of that?

I think this is another interesting California issue, which is the issue of housing. In California, it's very difficult to build housing in the city, so a lot of times it gets built out in what's called the wildland-urban interface, so it's sort of the woods.

If you look at the growth of housing units in the WUI, the wildland-urban interface, it's increased by about 46% since 1980. We've built a tremendous amount of housing stock in these very high-risk areas. It's not just a California issue; that's across the West—Idaho, Montana, Yellowstone, and all that kind of stuff.

There's been tremendous growth of housing in these areas, and I think that's a big part of why wildfires today are much more serious than they were 20 years ago. If you burn a million acres 20 years ago out in the woods, you may affect some housing, but it wasn't affecting major cities and neighborhoods. Now, as these neighborhoods have been built out into the wildland-urban interface, these fires have a much more significant impact.

We haven't really evolved the way we build these communities to recognize that. Again, it's very unpopular to have pro-fire building codes. One of the sad anecdotes is that the city of Paradise was essentially leveled by the Camp Fire in 2018. When the city went to rebuild, there was an opportunity to pass more significant building codes at the local level, and that was voted down because it was seen as too expensive and too restrictive for people to build.

Paradise largely got rebuilt with existing building codes. Rationally, it doesn't make any sense, but again, it's about the political will to get stuff done. Solving the WUI problem requires us as a society to think differently about these risks. You wouldn't build a house on the ocean, on the sand, without the right type of foundation, floodgates, or a raised house. Yet we go and build houses in these tinderboxes without recognizing what needs to happen there.

Again, I think that's just a place that needs to catch up.

I think one thing that happened after some of the fires in the '60s was that people actually installed sprinkler systems on their roofs, externally, right?

Yeah, they could basically pump water on their roofs during fires.

One of the things that was really striking, if you look at videos that have been coming out of the Palisades, for example, is that the projects that Caruso had in Palisades Village were completely intact. I think it's because, as the fire was happening, he just went and sprayed it all with fire retardant. Why didn't that happen at a larger scale?

When you have a large wildfire incident, initially, the fire department does what's called initial attack. You're going after the wildfire and trying to stop it. If you're not successful there, you enter a much more prolonged campaign incident.

Typically, in these high-wind conditions like the ones we're seeing in Southern California, the fire department switches gears to structure defense. You actually can't suppress these large flame fronts. You can use aircraft, but even that—the physics of it are just too great. They typically switch to protecting structures, so they fan out and protect them.

A couple of things happened here that made it really difficult. One, everyone decided to come out of the Palisades at the exact same time. They all got on the road and then abandoned their cars, so you couldn't actually get engines and trucks into these neighborhoods to do structure defense. But that was their intent. They were going to spray down a bunch of houses, but they just couldn't get enough units up there quickly enough.

One of the claims associated with that was that the fire department was undermanned and under-resourced. There was a $17.5 million budgetary cut for the fire department by the incoming mayor. There were also claims around a lack of training, lack of personnel, and other issues, in addition to a lack of water. It sounds like it was this multipronged issue beyond just access. Any thoughts about these different factors?

Certainly, water was an issue. There's been a lot of kerfuffle on Twitter where people are claiming that this was because the water bill wasn't acted on, or that it was somehow related to this. I don't think that is actually true at all.

The water issues were related to the fact that there are three 1-million-gallon tanks. As houses burn down, the plumbing opens. If you've got a 5/8-inch or 1/2-inch plumbing connection into a house, that's going to run at 20 or 30 gallons a minute. You have 500 of those going, and you've got really significant water flow and pressure drop. Those water systems are just not really built for these urban-firestorm environments.

There's plenty of water in the state of California, at least sometimes, and there was water here, but I think the water issue was much more about the scale of the incident. Access was an issue. In terms of staffing, that's not my area of expertise.

Given the scale of the LA Fire Department budget, I don't think $17.5 million is really all that much. In California, we have some of the best-resourced fire agencies in the world. CAL FIRE's budget is, I think, about triple what the U.S. Forest Service budget is. In my opinion, we are relatively well-resourced, at least compared to most of the other areas.

I think these incidents need to be addressed before they start. Once they do, they're very hard to stop. If you had 20% more engines, I don't think it would have made a difference.

Sure. Related to the water side of it, it sounds like reasonably simple infrastructure to build out, right? In other words, you could build more reservoirs, you could do a variety of things that should really impact supply in terms of need, as well as how you distribute water in such an event—flame retardants or other things. It seems very doable from an infrastructure perspective. Why do you think the state of California or the cities haven't really acted on that?

In this case, the water in those tanks was a sufficient volume. It was just about the system being depressurized. Maybe one of the big learnings from this is that the systems need to be built more modularly, right? They need to be able to shut off neighborhoods in order to preserve the water supply.

So, again, I think there’ll be a bunch of investigations done, and hopefully some learnings emerge from this. I push back a little bit on the blanket idea of, “If we just had more reservoirs.” I think this is actually a very acute issue. It’s not that we shouldn’t talk about reservoirs. I think the state of California does mismanage its water broadly; I just don’t think it has a lot to do with the Palisades running out of water.

I do think we do a terrible job managing our water overall, but I think some of the connections that are being drawn, in my opinion, are a bit tenuous.

If you were to change the infrastructure of a city to be able to do fire suppression optimally, what would be the big changes that you would make? Or what do you think you would prescribe if you were a mayor of LA for the next 5 years? What would you build out?

I think you need to think about these neighborhoods in sort of layers. If your homes are on the outskirts, those homes need to be protected at a much higher rate than the homes on the inside. Because once the fire enters a community, it’s really not a wildfire anymore. It’s called an urban conflagration, and it’s basically houses burning, spreading house to house. It’s similar to what happened in Chicago or San Francisco in the early 1900s.

Those fires have much different dynamics. They’re not really wildfires, and those fires are very difficult to stop once they start. But if you can stop it at the perimeter and not have to battle it street to street—if you can fight the fire out on the outskirts and not have to battle it street to street—to me, that’s the big thing we should all be trying to solve for.

And so, on those houses on the outskirts, it’s really aggressive defensible-space regulations and enforcement. That means making sure that you don’t have grass and landscaping up to the structures, modern roofing, modern building materials on the house itself, and tempered glass. There could be rooftop sprinkler systems and water supplies there for the house and fire department.

Even things like large driveways really help because they can get fire trucks in and turn around. When the fire department comes in to triage in these areas, they’re quickly looking at a house and sizing it up. They’re like, “Can we protect this house? Is it safe for us?” If you can make that house safe for a firefighter, the chance of survival for that house goes way up. And so, thinking about how we make those homes on the perimeters of our communities really defensible, I think it’s going to be our best bet.

And then, you mentioned preventing fires from starting to begin with. It seems like there are a few different major causes of fires. There are some power-line-related incidents that have happened in the past couple of years. There are cigarette butts and arson. So I’m a little bit curious how you think about what you actually do to prevent things from starting in the first place.

I think the first place to start, in my mind, is the utilities. Utilities cause about 11% of ignitions, but those ignitions cause 50% of the damage. And why is that? It’s because the same sort of high-wind conditions that cause massive fires and extreme fire conditions also cause utility equipment failures and lines to fall and stuff like that.

For utilities, there’s a lot that they can do. They can do vegetation management, basically trimming trees along power lines. Our fund has an investment in a company called Overstory that helps utilities prioritize where they’re going to trim these trees for maximum effect.

There’s an acronym called PSPS or ESPS, which are public safety power shutoffs or enhanced safety power shutoffs. These are basically de-energizing lines in advance of a red-flag event and having more sensitive breakers on the circuit so that if there’s a short, it de-energizes quickly. They’re not very popular with people. People don’t like to have their power shut off, particularly before a big wind event, but it can be a big improvement for safety.

And then there’s undergrounding and things like that as well, but those are very expensive. Undergrounding can cost $3 million to $4 million a mile, and so that manifests in larger electrical rates. If you can fix utility ignitions or reduce them a lot, that’s like 50% of the damage reduced right off the bat.

Lightning is probably about a third. Typically, lightning causes large-acre fires, but fewer urban-interface fires because they typically start further out. And there’s not much you can do about lightning, although we have seen some startups that are trying to figure out ways to de-energize large thunderclouds, which is kind of cool.

And then there’s arson, which is actually a surprising cause of damage. At least 10% of ignitions are arson or human-caused. I suspect that it’s on the rise. I don’t have hard data about this, but just from conversations I’ve had with fire chiefs, it is a massive issue.

How would you explain the level of underinvestment from the utilities in mitigation here? I’ve seen estimates from energy association reports that we’re $100 billion behind in, as you said, undergrounding or whatever mitigations. And it’s not as if this is a new issue. The Camp Fire is sort of the prototypical example in California, where a hook on a transmission line that was 97 years old failed, causing the line to hit the transmission line and incinerate the city of Paradise. How can we have electrical equipment that’s 100 years old? It just seems bonkers.

I feel like I’m defending all the least popular people here—California politicians and now utilities—but the reality is that utility rates are regulated. Utilities actually love to spend CapEx. Their business model is, if PG&E spends $5 billion undergrounding lines or upgrading transmission lines, they get to mark that up by 15% and pass that through to ratepayers. They love it. That’s how they make money.

There’s this, I think, ill-informed narrative that the utilities don’t want to spend the money. They actually love to spend the money. They would die to spend that money. The issue is the regulators and the ratepayer advocates that basically say, “We don’t want the electric bills to go up by too much.” And so there’s a constant pushback against those investments.

That’s what’s gotten us to where we are now, where we have a really aging system because there’s been this pushback against higher electrical rates. In my opinion, the cost of energy generation is artificially low right now. It does not reflect the risks of wildfire, and so it probably means that electric bills need to go up, particularly in high-fire-risk areas, to fund a lot of this CapEx.

It’s undergrounding, equipment upgrades, all that other kind of stuff. I don’t have a number for you, but it’s hundreds of billions of dollars.

How do California utility bills stack up relative to less-regulated states?

They’re high. So the question is, why is that? And then you could imagine why people may have some concerns about increasing rates further in a system that is both aging out, poorly invested in, and yet has higher rates than most other places. It is a very rational concern.

I guess my argument is that the risk here in California is much higher. You could have a utility line go down in New Jersey, where I grew up. You might start a wildfire, but it’s not going to see quite the level of catastrophe that we saw. The risk tolerance there is different, and so I don’t think our rates necessarily reflect that.

I think there’s also waste in the system. There are crazy requirements to generate a portion of energy from biomass and stuff like that that are expensive, don’t really make sense, and cost a lot of money. So I think we could reorient to being a lot more efficient, but I think, in my opinion, more money needs to be spent on de-risking the electrical system.

Now, I think we could take it from some of the other areas where I think we misspend.

You did demystify one other complicated issue between a set of corporations and regulators. There’s been a bunch of anger about how it’s very hard to get fire insurance in large parts of California. I think there’s a perspective that the insurers are evil for not insuring large areas. You just started an insurance company. Can you explain this?

Insurance rates in the admitted market are regulated, right? And so you have to basically file a rate sheet with the regulator. They say, “Yep, you’re charging an appropriate amount—not too much, not too little”—and you go sell that policy out in the market.

But you are not allowed in those rate applications to include the cost of reinsurance, and you had to use historical models, not forward-looking models. Those were 2 massive issues because the cost of reinsurance in California has at least doubled, maybe tripled, over the last 5 or 10 years. You have a cost that just tripled and you cannot pass it through. I mean, that’s sort of a crazy thing, right?

I assume forward-looking risk is higher than historical risk as well.

Exactly. And you’re using 30 years of historical data to try to price risk, which we all agree has changed significantly over those 30 years and probably will continue to change going forward. And so insurers are looking at their view of this risk and their cost to service that risk versus the rate that they can charge.

And they're just like, “This is not a business. We can't do this.” There are other issues on top of that, too, which is that it's very hard to exit policies once you've written them. The California FAIR Plan actually has a surcharge for insurers in the state by market share. So just by writing another policy in the state, you end up carrying more of the FAIR Plan risk as well.

We've created this very adverse environment for insurers in the state. What's happened, predictably, is there's been a mass exodus, where they've canceled or non-renewed huge amounts of policies, particularly in high-fire-risk areas. There's been a minor shift in the last 3 to 6 months where the insurance commissioner, because of this exodus, has changed their view, now allows the cost of reinsurance to be factored in, and now allows forward-looking models to be used for the first time. There's a bunch of restrictions on it still, but it sort of took market failure to correct that behavior.

By the way, that's an elected position and generally is highly influenced by consumer groups that want to just keep rates low. We've choked rates so low that we broke the system. Now it's reorienting. A lot of those policies have moved to the FAIR Plan, which is this subsidized insurance plan of last resort, or to what's called the non-admitted market, which is basically the unregulated market. That's what Stand, one of our companies, participates in. They write non-admitted policies, which are not subject to those pricing regulations.

So, I guess as we think about dealing with this overall set of issues, there are a few different things that sound like we can do. One is regulation and policy around thinning out densely forested areas and otherwise addressing underbrush and fuel-related areas.

Totally.

It sounds like a second one may have to do with infrastructure around water and the ability for certain neighborhoods or other things to turn off water to preserve water pressure. There may be other aspects to that. There's how you think about insurance and protecting people and effectively changing policy or regulation there. What do you think could be done from a technology perspective? Why aren't there swarms of drones spraying parts of the city? What is the more technology-driven stuff that you think should be done?

We're working on that. I think there'll be more to come in that arena. On drones specifically, the capabilities of drones to lift a sufficient payload, plus regulations around beyond-visual-line-of-sight operations, just haven't been sufficient for many years. I think that has very recently changed. The regulations have changed, the drones themselves are a lot more capable now and can carry a lot more, and our ability to do swarming.

In my opinion, over the next 5 to 10 years, we will see exactly what you're talking about: drones to do rapid initial attack. You get an ignition detected from a camera or satellite, and pre-positioned drones can get there very quickly before the fire has a chance to grow. Or drones can do structure protection and defense, fanning out to spray a bunch of houses. You avoid the road and access issues that we saw earlier, and you avoid the water issues because they're carrying stuff with them, too. I think that will be a big tool in the toolkit over the next decade.

Are there any dumb versions of that? I continue to be struck by the Palisades Village. Basically, a guy shows up, sprays it with flame retardant, and saves this whole complex, right in the middle of where everything else burned down. Why aren't there just tanks of flame retardant that citizens can go and start using in the context of a fire? Or really simple, distributed, cheap infrastructure?

Honestly, homeowners should invest in that themselves, in my opinion. I have my place up in Mendocino. I've got probably 20 gallons of Barricade gel, and if there's ever an issue, I'm going to spray my house down. I think that's part of it.

Some of the large insurers actually have private services that will come do structure defense. One of the issues here in L.A. was that it happened so quickly that there wasn't time for those folks to get there. But there are solutions like that. The departments themselves have those capabilities as well. So, yes, I think there's no reason someone shouldn't have 20 gallons of that stuff, an applicator, and a fire pump in their garage if they're living in the wildland-urban interface.

If we want to think now about recovery, obviously the fires are still, unfortunately, raging while we're having this conversation. But if we think out 6 months or 12 months, how do we optimally help accelerate the recovery of the Palisades or other parts of L.A. that are affected? Is it building-code changes and review processes? Is there some toxic environment left behind that needs to be cleaned up? How do you think about remediation in as rapid a time frame as possible, and what are the components of that?

Yeah, it's a good question, and this is probably a little bit less in my area of expertise. Certainly, after large fire incidents, cleanup is needed, and there are a number of chemicals from firefighting and from housing—all this nasty stuff that needs significant cleanup.

I do think we should seize this as an opportunity to rebuild the right way. The Palisades is a beautiful place. People are going to want to live there. We should rebuild in a safe way, and there's going to be pushback. A lot of these houses were not insured or were underinsured, so it's going to be very expensive to rebuild. Rebuilding to a higher standard is going to be difficult, but if we don't do that, we're just setting ourselves up for this to happen again. My vote would be that we really take the building-code opportunity seriously when all this construction does happen.

It's interesting because almost all the problems that you mentioned seem to be regulatory and policy problems. We're overburdening people with the ability to clear out dense forests. We're overburdening insurance companies so they can't actually insure these houses. We're overburdening basically every aspect of the system. This just sounds like more overburdening.

For sure. And by the way, I'm not disagreeing with your point. I guess it's more a question of how do you make it easier to do things versus harder? To me, the real answer, which I think is harder but probably the real answer, is actually to have insurance companies create an actual free market for insurance, where they can say, “I will only insure your house if you do these things,” and actually use market forces to drive behavior.

But that's putting it on the citizens. What should the city be doing to protect its people? How do you create a safe and good environment for the people who are paying you taxes?

I think that is investing in the infrastructure and taking a really serious look at fuel management on the outskirts. There's no reason there shouldn't be a really significant fuel project around these towns and communities. In Lake Tahoe during the Caldor Fire, there was a lot of fuel management done, which actually saved South Lake Tahoe, a lot of people think. That can really work. It's actually really not that expensive. It just requires the political will to do it. So things like that, I think, are essential.

Bill, how do you think that happens? You described forest management, density-management policies, and controlled burns as just very unpopular. Some set of people are going to change their point of view in the L.A. area. What do you think is the mechanism of action by which it becomes popular enough that regulators change their point of view here? Is that a propaganda campaign from a single politician? What's the driving force?

I want to create a Smokey Bear 2.0, which is—rather than talking about putting out wildfires—how does Smokey become an advocate for more fire, for healthy fire, for controlled burns? I think unless we can really make that point to people, the behavior won't change.

I think politicians ultimately just do what people want them to do. Florida's figured it out; California has not. And it's not just a red-blue thing. There's a very famous case up in Oregon where a local Republican sheriff arrested a U.S. Forest Service employee for doing a prescribed burn.

It is deeply unpopular to light things on fire next to people's properties unless it's done properly and with the right approach. So that's why I'm personally pretty focused on how we change hearts and minds around prescribed fire and teach people that it can be safe and that it's essential. If we don't do that, we're just going to be picking some new politician to blame the next time something burns down.

Well, it seems like a pretty clear trade-off, right? A controlled burn is safer than an uncontrolled wildfire in a giant urban area—an 8-times-the-size-of-Chicago fire, right? You can take your pick. The forests are going to burn. We can do it on our terms, or they can do it on their terms. That's the message I think we need to get through, and unfortunately, wildfires are just infrequent enough that people forget.

We're going to put this fire out. There'll be a shift in the El Niño–La Niña pattern. L.A. will get a bunch of rain next year, and we'll be dealing with mudslides. We'll think about other stuff, and then 6 years from now we'll have another one of these incidents. So how do we sustain that?

Part of what I'm trying to figure out is how we create a cultural movement around more timber and more fuel management, and make that easier and just part of who we are.

If you were to do 1 thing as a homeowner to protect your house going forward, what would you do?

I'd probably just focus on defensible space. There's this concept of Zone 0, which is the first 5 feet around your structure. That should be clear of any flammable materials. It is not in most houses; there's landscaping and azalea bushes or whatever.

But if you can remove that, it has a pretty significant impact on your home's propensity to burn. Probably the next thing would just be a good water source, so that, again, it can be attractive for a fire department to actually defend your home. If you have defensible space and a good water source, you're in the top quartile.

And then, I guess, if you were to do 1 thing to help expedite rebuilding in L.A., is it just a change to the permitting process for reconstruction, or would it be something else?

Yeah, what if you offered fast-track approval—maybe you don't change the building code, but if the home met a higher standard, then you would fast-track approval? You get 2-week approval instead of 6-month approval. I'm not sure what the approval processes are in L.A. Here in San Francisco, it's years.

But if we could offer incentives for people to rebuild safely, that feels like a good use of time and taxpayer dollars.

Maybe one last question for you, since we're almost out of time, Bill. We are still at this 0% containment level. How does that change? When does this become something under control?

Honestly, I think 3 things stop large wildfires: the weather changing, the ocean, or really large aircraft dropping huge amounts of retardant. You can't drop huge amounts of retardant in neighborhoods. It's too destructive and disruptive, so you can't do that.

The ocean is pretty far away from some of these fires. It stopped it in the Palisades, but I think it's a lot of structure defense and riding out the weather change.

Can I ask perhaps one last triggering question? What would a more authoritarian country do?

There would be aggressive restrictions on where homes can be built and how they are built. I think there would also be a lot more surveillance. If you can detect fires quickly, you can respond more quickly, so I think that's probably another one.

Those are at least the 2 things that come to mind for me: being much more restrictive on how people build. If you had a lot of surveillance, you should be able to pick up arson really fast, too.

I actually think there's a really big national security issue here around wildfire that doesn't really get talked about. It's one thing to do it to a neighborhood, but what about a military base? What about a nuclear power plant?

It's not just the sensitivity of these sites, but also that it's one thing to have 3 or 4 fires, but what if there were 30? At what point does the system get overwhelmed? It doesn't require all that much to do that.

I think taking the national security aspect of this seriously is incredibly important, and I think we're just not. There's a part of me that unfortunately waits for the day when that's going to be something really significant.

Bill, thank you for doing this. We're thinking about everybody in the L.A. area.

Thanks for having me on.