The Forest Will Burn. The Only Question Is on Whose Terms.

Elad Gil and Sarah Guo recorded this No Priors episode on Thursday, January 9, 2025, in the middle of the day, while Los Angeles was still burning hour by hour. Friends had lost homes. A string of major California fires had already made the question feel overdue: what actually causes these events, and which technologies and policies can still intervene? Their guest is Bill Clerico, who sold the payments company WePay to JPMorgan, then left to start Convective Capital, a fire-focused early-stage fund, and later co-founded the wildfire insurer Stand. Both hosts have known him for years as a fixture of the Bay Area tech community.

Gil tries to knock away the usual objection-handling before they start. One camp says it is just climate change, nothing to be done; the other says that whatever the climate does to storms, wind, and dryness, society can still intervene. Clerico calls the cop-out answer the true one: it is very much both. Longer, hotter, drier fire seasons are in part caused by a warming climate, and that exacerbates wildfire. The reason fires reached a crescendo in the last ten years, in his opinion, is not climate. It is forest management and the way the electrical grid was built — more acute, self-inflicted wounds, and therefore the ones that can be addressed immediately.

Gil’s follow-up is sharper. If you really believe in climate change, you should prepare *more*: more events imply more aggressive infrastructure. California, and some neighboring states, have done the opposite. Clerico notes that even inside climate investing the mix is lopsided. Of climate capital deployed, 98 percent goes to mitigation, meaning reducing CO2, and 2 percent to resilience and adaptation. He thinks that pendulum is swinging rapidly, and that it should. Emitting less carbon would be great. The carbon already in the air still has to be lived with, and his fund is a bet on that ledger.

The first and, in Clerico’s view, most important factor is fuel. Forest density in the United States has increased about threefold over the last hundred years, and in many places far more than that. Starting in the 1930s, the U.S. Forest Service adopted a policy of maximum suppression, including the famous 10 a.m. rule: hear about a wildfire, and it has to be out by 10 a.m. the next morning. The intent was to protect timber and towns, and for a long time it worked. Forests that had burned often at low severity simply got denser. Dryness and heat now sit on top of that pile, and because suppression is still the policy, the density is still rising.

Undoing it takes two tools, both important and both made difficult by how the country governs itself. Prescribed fire means lighting burns in the spring, under a tight set of conditions, to consume the fuels before summer does it randomly. Mechanical thinning means cutting trees. Neither is popular. Nobody wants a prescribed burn next to their house; nobody wants a smoky weekend to ruin Tahoe. Gil adds the smaller rules that compound the density: fallen wood you are not allowed to haul off your own land, and a thicket of other policies that affect fuel, ignitions, and the right to treat a forest.

Clerico has the bill from his own land. He owns 170 acres of Douglas fir and redwood, a property Guo has visited, and wanted to log parts of it with a conservation strategy. It took three years and an enormous amount of money, including hiring a contract biologist to come to the middle of nowhere six times over two years to call for the northern spotted owl. The environmental rules were well intended. Over decades they became a morass. Nobody, he says, has stepped back to ask whether spotted-owl habitat or incinerated towns is the higher priority, or whether a rational trade-off is even allowed. Red tape adds expense, slows the work, and often means it does not happen.

Gil has looked up the review times. For higher-risk forests that need prescribed burns, simple projects average 4.7 years of environmental review; complex ones take about seven and a half. The Sierra Club sued the Forest Service in 2007 to block a categorical exclusion for fuel-reduction burns. The Forest Service, by one statistic they cite, spends 40 percent of a budget of about $250 million a year on planning — dealing with this process. Clerico calls that a misuse of taxpayer dollars that the agency is legally stuck with. A bipartisan House bill, the Fix Our Forests Act, led by Representative Bruce Westerman of Arkansas with California partners, is trying to do permitting reform. His verdict on the current condition is shorter: laughable. A joke.

Guo asks how much of this is federal and how much is California. Clerico starts with numbers. Florida, a state people do not always associate with wildfire, does two to three million acres a year of prescribed burning and is among the most advanced in the country at it. California set a goal last year or the year before of 100,000 acres, and he is pretty sure the state fell short. The aspiration is to build toward a million acres over the next decade. There is, he says, very much a California problem.

Politicians are part of it. Culture is the other half. Florida has been doing this for decades: the public accepts it, local governments like it, a workforce is comfortable with it, and public-safety agencies are too. California has drifted far away, into fear. If you are a local burn boss or fire chief, prescribed fire is the right thing to do and a career risk if it escapes, burns someone’s property, or starts the next Palisades fire. The risk lands on one person; the benefit is public. In many cases the risk outweighs the benefit, and there is no cultural momentum to absorb a mistake. California’s forests are also different from the Southeast, with a different risk profile, so some caution is earned. Political will still has to catch up.

Later he will say the same thing as a communications project: he wants a Smokey Bear 2.0, an advocate for healthy, controlled fire rather than a mascot who only tells children to put fires out. It is not a red-blue split. A well-known Oregon case had a local Republican sheriff arrest a U.S. Forest Service employee for doing a prescribed burn. Lighting things next to people’s property is deeply unpopular unless it is done with the right approach and the right story. Forests are going to burn, he tells them. We can do it on our terms or they can do it on theirs. Wildfire is just infrequent enough that after the rain comes, Los Angeles will worry about mudslides, and six years later the cycle repeats.

Gil turns to the Palisades: hillsides dense with trees next to a city. Clerico treats that as a housing story. It is very difficult to build in California cities, so a lot of stock goes into the wildland-urban interface — the woods. Housing units in the WUI have increased about 46 percent since 1980, not only in California but across the West, Idaho and Montana included. Burn a million acres twenty years ago and you mostly burned trees. Burn the same fire now, after neighborhoods have been built out into that interface, and you hit cities. Building codes have not caught up, in part because fire-wise codes are unpopular. After the 2018 Camp Fire leveled Paradise, the town had a chance to pass stricter local codes and voted them down as too expensive and too restrictive. Paradise was largely rebuilt to the old rules. You would not, he says, build on ocean sand without a foundation and floodgates. People build in tinderboxes every day.

Guo notes that after 1960s fires, some roofs got external sprinklers, and that Rick Caruso’s Palisades Village stood intact because, as the fire arrived, he sprayed the complex with retardant. Why didn’t that happen at scale? In the first phase, departments try initial attack. If that fails, especially in high wind, they usually switch to structure defense, because large flame fronts exceed even aircraft physics. In the Palisades, everyone left at once, jammed the roads, and abandoned cars, so engines could not get in to do the spraying they intended. Water failed too, though not for the reason Twitter invented. Clerico does not buy the claim that an un-acted-on water bill caused the shortage. Three one-million-gallon tanks held enough volume. As houses burned, plumbing opened. A half-inch or five-eighths-inch service line runs 20 to 30 gallons a minute; five hundred of those at once collapses pressure. The system was not built for an urban firestorm.

A $17.5 million cut to the fire department by the incoming mayor made headlines. In the scale of the Los Angeles budget, Clerico does not think that sum is decisive, and staffing is not his expertise. California’s agencies are among the best resourced in the world; Cal Fire’s budget is about triple the U.S. Forest Service’s. Twenty percent more engines, in his opinion, would not have changed this outcome. These incidents have to be addressed before they start. Once they are going, they are very hard to stop. More reservoirs are a separate, real California water-management failure that he does not want glued to this fire. The Palisades lesson is modularity: the ability to shut off neighborhoods to preserve pressure for the rest.

If he were designing a city for suppression, he would think in layers. Homes on the outskirts need far more protection than homes inside, because once fire enters a community it is no longer a wildfire. It is an urban conflagration, house to house, with the dynamics of Chicago or San Francisco in the early 1900s, and those fires are very hard to stop. Aggressive defensible space, no grass and landscaping against the walls, modern roofing and building materials, tempered glass, rooftop sprinklers, on-site water, and driveways wide enough for an engine to turn around all change the triage. Firefighters size a house up in seconds: can we protect this, is it safe for us? Make the perimeter house safe for a firefighter and its odds jump. Hold the perimeter and you never have to fight street to street.

Prevention, for Clerico, starts with the utilities. They cause about 11 percent of ignitions and 50 percent of the damage, because the same high winds that make a fire catastrophic also drop lines and fail equipment. Vegetation management along those lines is the first lever; Convective Capital invested in Overstory, which uses imagery to help utilities decide where trimming has the most effect. Public safety power shutoffs de-energize lines ahead of a red-flag event. More sensitive breakers kill a short faster. Undergrounding is the thorough, unpopular version, at $3 to $4 million a mile, paid in rates. Cut utility ignitions a lot and you cut about half the damage on the spot. Lightning is about a third of ignitions and usually starts farther out, producing large acreage with less urban interface; a few startups are even trying to de-energize thunderclouds. Arson or other human cause is at least 10 percent, and fire chiefs have told him it is a massive, possibly rising, issue.

Guo has seen estimates that the system is on the order of a hundred billion dollars behind on undergrounding and other mitigations. The Camp Fire’s emblem is a hook on a transmission line that was 97 years old when it failed and incinerated Paradise. Why does hundred-year-old kit still hang? Clerico finds himself defending two unpopular tribes, California politicians and utilities. Rates are regulated. Utilities love to spend capex: if PG&E spends $5 billion undergrounding, it marks that up about 15 percent and passes it to ratepayers. That is the business model. The brake is regulators and ratepayer advocates who do not want bills to jump. The result is an aging system and, in his view, energy prices that are artificially low relative to wildfire risk. Bills, especially in high-fire areas, probably need to rise by hundreds of billions of dollars’ worth of work. California rates are already high versus less-regulated states, a rational worry. His reply is that a downed line in New Jersey, where he grew up, is not the same catastrophe as one in Southern California wind, and that some waste — including odd biomass-generation mandates — should be cut so the money can move to de-risking the wires.

Insurance is the other broken market, and Guo notes the anger at carriers who will not write large parts of the state — even as Clerico has just started one. In the admitted market you file a rate sheet and cannot, in those applications, include the cost of reinsurance. You also had to use historical models, not forward-looking ones. Reinsurance costs in California have at least doubled, maybe tripled, over five to ten years, and you could not pass that through, while everyone agrees the risk has changed over the thirty-year history you were required to use. Exiting policies is hard, and the California FAIR Plan surcharges insurers by market share, so writing one more policy loads you with more residual risk. The predictable result was a mass non-renewal, worst in high-fire zones. In the last three to six months the elected insurance commissioner, under pressure from the exodus, allowed reinsurance costs and, for the first time, forward-looking models, still with restrictions. It took market failure to correct the behavior. Consumer groups had choked rates so low the system broke. Policies have shifted to the subsidized FAIR Plan of last resort or to the unregulated non-admitted market, which is where Stand writes.

Gil asks the question everyone asks: why are there not swarms of drones spraying the city? Clerico’s fund is working on that. For years the machines could not lift enough payload, and rules around flying beyond visual line of sight were too tight. Both constraints have just moved. Drones carry more, swarming is more mature, and the regulations have changed. Over the next five to ten years he expects two jobs to show up in the toolkit. One is rapid initial attack: a camera or satellite sees an ignition, pre-positioned drones arrive before the fire has a chance to grow. The other is structure defense, fanning out to spray houses, skipping the abandoned-car roads and skipping empty hydrants because the payload comes with them.

Gil wants the dumb version too — tanks of retardant that citizens can use, the Palisades Village trick without waiting for a billionaire or a breakthrough. Clerico’s answer is that homeowners should invest in it themselves. At his place in Mendocino he keeps about 20 gallons of Barricade gel; if there is ever an issue, he will spray the house. Some large insurers already run private structure-defense teams. In Los Angeles the fire moved too fast for those crews to arrive. Fire departments have the capability as well. There is no reason, he says, that someone living in the wildland-urban interface should not have 20 gallons of gel, an applicator, and a fire pump in the garage.

Containment at recording time was still zero percent. What actually stops a large wildfire? Clerico’s list has three items: the weather changing, the ocean, or really large aircraft dropping huge amounts of retardant. You cannot drop that kind of load in neighborhoods; it is too destructive. The ocean is far from some of the other fires; it did stop the Palisades. In between, the work is structure defense and riding out the wind.

Recovery is a little outside Clerico’s core expertise, but he is clear on the ugly first step: after a large fire there is nasty cleanup, firefighting chemicals mixed with housing materials, that has to be done properly. Then comes the window. The Palisades is beautiful; people will want to live there. Rebuild it safely, or set the same fire on the calendar again. Pushback is guaranteed. Many houses were uninsured or underinsured, rebuilding is already expensive, and a higher standard will be painful. His vote is to take the building-code opportunity seriously anyway.

Gil objects that almost every problem in the hour has been regulation making things harder — thinning, insurance, the rest — and a stricter rebuild sounds like more of the same. Clerico does not disagree. The harder, realer answer is a functioning insurance market that can say: we will only cover you if you do these things, and let prices drive behavior. That still puts the work on citizens. What should the city do for the people who pay its taxes? Invest in infrastructure, and take fuel management on the outskirts seriously. Around Lake Tahoe, fuel work before the Caldor Fire is widely credited with saving South Lake Tahoe. It is not that expensive. It requires political will. For Los Angeles specifically, he would rather incentivize than mandate: maybe you do not change the code, but if a home meets a higher standard you fast-track approval — two weeks instead of six months, rather than the years it can take in San Francisco.

Guo’s last triggering question is what a more authoritarian country would do. Clerico’s two answers are aggressive restrictions on where and how homes are built, and a lot more surveillance, because fast detection is fast response and would also catch arson. Then he names the fear that does not get talked about. A neighborhood is one thing; a military base or a nuclear plant is another. Three or four fires at once is one problem; thirty is a system that can be overwhelmed, and it does not take that much to get there. He thinks the national-security aspect of wildfire is being ignored, and a part of him waits for the day something really significant forces the issue.

If a homeowner does only one thing, he would clear zone zero: the first five feet around the structure, free of flammable materials. Most houses have landscaping and azaleas in that band, and removing it has a significant effect on whether the home ignites. The next thing is a good water source, so the fire department finds the house worth defending. Defensible space plus water puts you in the top quartile. Live in the interface, and add the gel and the pump. California, across the hour, does not lack answers. Florida has been running them for decades; the toolbox is already on the shelf. Clear the five feet before the next wind event. That is the vote an ordinary household can still cast.