Climate-exacerbated wildfires are estimated to cost the United States between $394 billion to $893 billion each year in economic costs and damages, a number that is considerably higher than existing estimates.
Senator Martin Heinrich (D-NM), Chairman of the US Congress Joint Economic Committee (JEC), recently released a report authored by the JEC Democratic Majority, that highlights these staggering figures.
According to the report, the $394 billion and $893 billion in damages annually, is equivalent to between 2-4% of U.S. GDP.
This range is notably higher than previous estimates which marked the total cost of wildfires between $87.4 and $427.8 billion in 2022 dollars annually based on a smaller subset of costs.
It should be noted, that the economic costs includes the likes of: insurance payouts, insurance premium increases, diminished real estate values, lost income, property and infrastructure damage, electricity costs, evacuation costs, federal wildfire suppression costs, tourism loss, as well as a range of other factors.
At the same time, the health costs of wildfires accounted for in the analysis includes direct deaths and injuries from wildfires, costs from short and long-term exposure to wildfire smoke, and psychological costs.
These major costs stemming from wildfires motivate continued policy action to reduce the incidence of catastrophic wildfires and address their significant effects on people and the globe.
The report highlights some critical actions that need to be undertaken by the government to help deal with the costs of wildfires. This includes, receiving investments from the Inflation Reduction Act to combat climate change, which will play a huge part in cutting down on the greenhouse gas pollution that is a big cause of these larger wildfires.
In addition, improving the aging US energy grid can also a play a key role in reducing the risk of wildfires ignited by electricity infrastructure.
JEC Chairman Martin Heinrich, commented on the figures: “The numbers are staggering. As things have gotten warmer and dryer, we’re seeing the high cost of inaction on climate policy. The impacts are even bigger than we thought. And because we’ve waited so long to act, we have very large bills coming due that deeply impact whole economies and communities. We’ve seen that directly in New Mexico, and other communities across the country are now feeling those impacts too.”
He continued: “I hope this report creates a sense of urgency at all levels of government for implementing real climate policies. When Americans decide that a problem is worth solving, there’s nothing that can’t be accomplished.”