Flares are a tool that can be used as a light source and can be thrown to scare away wildlife. Flares provide 1 in-game hour of light (or 5 real-time minutes), and unlike the torch, they can be lit in windy weather.
They seem to be more effective than a torch at scaring off wolves, but less effective than a rifle report.
An expended flare can be picked up, but it currently serves no purpose. An expended flare will be marked in the inventory as "RUINED" and have a red 'X' through the icon, but will continue to contribute weight to your inventory.
A flare cannot be harvested or repaired, but is fairly common to find.