“To date, there is no comprehensive public compensation mechanism in Portugal to reimburse losses and damages caused by forest fires suffered by public and private agents. While some public schemes exist to compensate farmers for losses caused by extreme bushfires and to support the recovery of burnt areas and agricultural infrastructure, they are often too slow in mobilising financial resources in the immediate aftermath of a bushfire,” states a report from the Organization for Economic Co-operation and Development (OECD).
The international organization, which brings together 38 countries, presented in Lisbon the project “Control of forest fires in the context of climate change: the Portuguese case” developed in 2021/23 by the OECD environmental policies committee, after the first conclusions, in May, in Porto during the eighth international conference on forest fires.
The OECD highlights the fact that it is not mandatory in Portugal to take out private insurance for the risk of forest fire and that most insurance that covers the risk of fire is available “in areas less prone to the risk” and is “normally taken out by large landowners who apply preventive measures and manage their land proactively.”
“These insurance schemes are characterised by high premiums, which make it difficult for insurance to penetrate smaller players. The lack of accessible insurance schemes represents a major challenge for reducing the risk of forest fires in Portugal and undermines long-term resilience”, the document reads.
The OECD highlights improvements in financing forest fire prevention, but considers that “some challenges remain”, such as “the lack of a specific financial envelope for the execution of projects” within the scope of the National Plan for the Integrated Management of Rural Fires, as well as private financing for reducing the risk of forest fires is also “largely insufficient in most cases”.