The harmful consequences of climate change are broad, from extreme weather events making locations uninhabitable to increased temperatures delivering larger and more frequent downstream damages, such as drought and increased hurricanes. These effects are already imposing serious economic costs and limiting economic growth in the United States and around the globe.

A telling barometer for the consequences of climate change are wildfires. Global warming is increasing both the frequency and the size of wildfires, both of which take a direct human toll due to their rising destructive force and their damaging impact on economic growth and prosperity.

The effects of these wildfires are far-reaching and long-lasting. These include local homes and small businesses being consumed in smoke and flames, as well as cities and counties being forced to shift economic priorities from growth and development to fire suppression and infrastructure restoration. Evidence suggests that, of an estimated $500 billion in new costs, people of color and other historically disadvantaged groups are disproportionately affected by these crises.

The persistent threat facing fire-prone states needs to be addressed. Some of the downstream macroeconomic effects of increased heat within the continental United States are relatively well-understood, such as the cost of drought on agricultural production and the immediate costs of residential home damage resulting from increased wildfires. There also is a notable amount of well-informed research regarding the social costs of wildfires in their aftermath.

But there is still much to learn regarding the economic impacts of wildfires. This issue brief reviews the scope and intensity of economic risks imposed by droughts that exacerbate wildfires and the direct costs to housing and businesses of wildfires, and then details on how wildfire suppression and mitigation efforts are worthwhile investments that must be undertaken carefully based on well-informed research, so that equitable U.S. economic growth in fire-prone states is strong and sustainable.

Read the full article about wildfires and climate change by Michael Garvey at Washington Center for Equitable Growth.