Economic footprint of California wildfires in 2018

The impacts of wildfires in the western United States have been increasing for decades. Combining physical, epidemiological and economic models, this study finds that the economic damage of California wildfires in 2018 was roughly 1.5% of California's annual gross domestic product. Recent increases in the frequency and scale of wildfires worldwide have raised concerns about the influence of climate change and associated socioeconomic costs. In the western United States, the hazard of wildfire has been increasing for decades. Here, we use a combination of physical, epidemiological and economic models to estimate the economic impacts of California wildfires in 2018, including the value of destroyed and damaged capital, the health costs related to air pollution exposure and indirect losses due to broader economic disruption cascading along with regional and national supply chains. Our estimation shows that wildfire damages in 2018 totalled $148.5 (126.1-192.9) billion (roughly 1.5% of California's annual gross domestic product), with $27.7 billion (19%) in capital losses, $32.2 billion (22%) in health costs and $88.6 billion (59%) in indirect losses (all values in US$). Our results reveal that the majority of economic impacts related to California wildfires may be indirect and often affect industry sectors and locations distant from the fires (for example, 52% of the indirect losses-31% of total losses-in 2018 were outside of California). Our findings and methods provide new information for decision makers tasked with protecting lives and key production sectors and reducing the economic damages of future wildfires.

Automated summary

This study found that the economic damage of California wildfires in 2018 accounted for roughly 1.5% of California's annual gross domestic product, with different proportions of capital losses, health costs, and indirect losses. The research highlights the indirect impacts of wildfires on the economy and emphasizes the actions that decision makers need to take to reduce the losses caused by future wildfires.