As deadly fires rage in Brazil and Greece braces for dangerous weather, wildfire season is in full swing. This period usually runs from June to late September and not only poses a serious threat to humans and wildlife, but also wreaks havoc on homes, landscapes and livelihoods. And the economic costs – for affected countries and individuals – have proven enormous.
How much do forest fires cost?
Bloomberg reported that wildfires in Europe caused €4.1 billion (£3.46 billion) in damage last year, with Greece, Spain and Italy bearing the brunt of the damage. And in Hawaii, state government officials spent more than $410 million (£310 million) to combat the aftermath of Maui’s wildfires in 2023, according to Honolulu Civil Beat.
When the long-term impact of wildfires is included, these costs rise immeasurably. The wildfires that raged in Sicily in 2023 caused more than €60 million (£50.7 million) in infrastructure damage in a matter of days, according to The Guardian, but “damage to agriculture from fires and the intense heatwave amounted to around €200 million.”
Subscribe The week
Escape your echo chamber. Get the facts behind the news and analysis from multiple perspectives.
SUBSCRIBE & SAVE
Sign up for the free weekly newsletter
From our morning news roundup to our weekly Good News newsletter, get the best of the week delivered straight to your inbox.
From our morning news roundup to our weekly Good News newsletter, get the best of the week delivered straight to your inbox.
The US Senate Joint Economic Committee released a report last year showing that “climate change-related wildfires” cost the US economy up to $893 billion (£675.5 billion) each year, a “shocking figure that is more than double estimates from previous government reports”, according to CNN.
Senator Martin Heinrich, chairman of the committee, told CNN that these numbers are “scary” and pose a threat to everyone – including those living in areas that are not prone to fire. Heinrich said he wants to “examine the cascading economic costs of wildfires” and “make the case for why lawmakers and officials should proactively spend money on resilience measures.”
“Some politicians have always said we can’t afford to do anything about climate change,” Heinrich told CNN. “But the reality is that the real cost to our economy is doing nothing about it and letting the situation get worse in the future.”
What impact do forest fires have on housing construction?
In addition to the obvious costs of rebuilding damaged or destroyed homes and businesses and accommodating displaced people, wildfires also have less obvious impacts on the population.
Take California as an example: As wildfire season wreaks havoc each year, homeowners insurance premiums have skyrocketed, in some cases by thousands of dollars, according to the San Francisco Chronicle. Some insurance companies operating in the state have increased their premiums. An S&P Global analysis shows a 43% increase in personal homeowners insurance premiums from 2018 to 2023 in California, while others have given up on California altogether, according to the Chronicle. The costs associated with wildfires “make an already expensive state even less affordable, including for those who live far from wildfire areas.”
The problem goes beyond insurance premiums. “Homeowners who had to pay a higher insurance premium may have a harder time selling their home” and will have to “factor higher premiums into their monthly payments, reducing the amount of home they can afford,” according to CNN.
“The cost per person is staggering,” the Chronicle said.
“When wildfires rage, the immediate threat is obvious – but the smoke from the fires actually kills far more people than the flames,” said Fast Company. “As fires become more frequent, this smoke is creating a public health crisis.”
A study published in Science Advances found that smoke from wildfires alone “likely contributed to more than 52,000 premature deaths” in California between 2008 and 2018. These deaths had an “economic impact” of more than $430 billion (£326 billion), the paper said.
Drinking water supplies have also been affected by wildfires. For example, a wildfire in northern New Mexico in 2022 left behind “muddy ash and charred soil” that contaminated the region’s Gallinas River and “threatened the city of Las Vegas’ drinking water supply,” CNN reported. According to the Senate report led by Heinrich, the resulting costs to water supplies were “very significant.”
“As communities like Mora and Las Vegas have had to figure out how to provide clean drinking water to their residents after the fires, it’s clear how expensive clean water really is and how dependent it is on infrastructure,” Heinrich told CNN.
