Achieving a 15-minute reduction in average response times could generate billions in economic benefits
Wildfires have been increasing in intensity and destructiveness in recent years. While other efforts have examined the costs of wildfires in different categories, this report is the first to draw on recent empirical research to estimate wildfires’ economic impacts within the State of California and is the first to provide a comprehensive estimate of their fiscal impact on the State’s General Fund. The work assesses the net economic, fiscal, and environmental impacts of wildfires in the State of California over the period 2017-2021.
The total economic value of wildfires’ costs in the state includes labor market disruptions, property damage, and losses of life. Over the 2017 – 2021 period, we estimate that average annual losses totaled over $117.4 billion. Of this amount, an estimated $5.0 billion annually was incurred as a fiscal loss by the State of California attributable to reduced tax revenues and increased wildfire response costs.
Image: Rendering of a low-earth orbit satellite system optimized for wildfire detection and tracking, courtesy of Environmental Defense Fund.
Research consistently shows that reductions in response times (i.e., the duration between initial detection and the arrival of the first suppression crew) are associated with reduced fire severity and a lower likelihood of fires escaping initial attack, thereby reducing acres burned, smoke days, and other fire-related impacts. Specifically, available research suggests that if response times were reduced by 15 minutes, the frequency of large uncontained fires could be reduced between three and seven percent. In other words, a hypothetical investment that helped California fire officials achieve a 15-minute reduction in average response times could be expected to generate $3.5 - $8.2 billion in economic benefits and $150 - $350 million in fiscal benefits (i.e., 3 – 7% of the estimated $117 billion in economic costs and $5 billion in fiscal costs).
Our analysis of wildfires’ environmental impacts also considers wildfires’ contribution to annual greenhouse gas (GHG) emissions. We find that the GHGs released during a typical wildfire season imposes a net cost of $1.2 billion. Table 1, below, summarizes these estimates.
Table 1 – Summary of annual wildfire-related costs in California: 2017 – 2021 average
Annual Losses Due to Wildfire | Cost (in millions) |
Total economic loss in California | $117,423 |
State fiscal loss (subset of total economic loss) | $5,035 |
Climate impact (global) | $1,168 |
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