Wildfires are a natural phenomenon that can occur when conditions such as high temperatures, low humidity, dry fuels, and ignition sources are met. While wildfires can have both positive and negative effects on ecosystems and biodiversity, they also pose a serious threat to human lives, health, property, and economy. In areas where human activities have altered the natural fire regime or increased exposure and vulnerability, the risks are even greater.

The costs and economic impacts of wildfires are complex and can vary greatly depending on the scale, intensity, duration, and location of the fires, as well as the characteristics and values of the affected resources and communities. There are two main categories of costs and impacts: intervention costs and losses.

Intervention costs refer to the expenses incurred to prevent, prepare, mitigate, suppress, and recover from wildfires. These costs include fire prevention and preparedness, such as fuel management, fire detection, fire education, and fire planning; fire mitigation, such as fire breaks, defensible space, building codes, and insurance; fire suppression, such as firefighting personnel, equipment, aircraft, and logistics; and fire recovery, such as rehabilitation, restoration, compensation, and assistance.

According to the National Interagency Fire Center, the federal government spent an average of $3.7 billion per year on fire suppression from 2010 to 2019, with a record of $5.1 billion in 2017. However, these figures do not capture the full costs of fire suppression, as they do not account for the expenditures of state and local governments, private landowners, or volunteer firefighters. In addition, they do not include the costs of other intervention activities, such as prevention, mitigation, and recovery, which can also be substantial and long-lasting.

A study by the National Institute of Standards and Technology (NIST) estimated that the annualized intervention costs of wildfires in the United States ranged from $7.6 billion to $62.8 billion ($2016 US), depending on the assumptions and methods used. The study also found that the intervention costs varied by region, with the highest costs in the West, followed by the South, the North, and the East.

Losses refer to the damages and benefits foregone due to wildfires on human and natural systems. These losses include direct losses, such as mortality, morbidity, property damage, infrastructure damage, and resource damage, as well as indirect losses, such as lost income, lost productivity, lost tax revenue, lost ecosystem services, lost recreation, and lost social and cultural values.

According to the National Oceanic and Atmospheric Administration (NOAA), the United States has experienced 298 billion-dollar weather and climate disasters from 1980 to 2020, 19 of which were wildfires. The total cost of these 19 events was $176.4 billion ($2020 US), with an average cost of $9.3 billion per event. However, these figures do not capture the full losses from wildfires, as they do not account for the damages and benefits not monetized, such as health impacts, environmental impacts, and social and cultural impacts. Additionally, they do not include the losses from smaller or non-declared wildfire events, which can also be significant and widespread.

A study by the NIST estimated that the annualized losses of wildfires in the United States ranged from $63.5 billion to $285.0 billion ($2016 US), depending on the assumptions and methods used. The study also found that the losses varied by region, with the highest losses in the West, followed by the South, the East, and the North.

The total economic burden of wildfires is the sum of the intervention costs and the losses. This burden represents the impact of wildfires on the US economy and can be used to assess the return on investment into another factor that contributes to the cost of wildfires is the suppression efforts. Suppression efforts are actions taken to put out the fire and prevent it from spreading. These efforts are usually performed by firefighting personnel, aircraft, equipment and logistics. The federal government spent an average of $3.7 billion per year on fire suppression from 2010 to 2019, according to the National Interagency Fire Center, and a record of $5.1 billion in 2017. However, these figures do not capture the full costs of fire suppression, as they do not include the expenditures of state and local governments, private landowners, and volunteer firefighters. Furthermore, the figures do not include the costs of other intervention activities, such as fire prevention and preparedness, fire mitigation, and fire recovery, which can be substantial and long-lasting.

Fire prevention and preparedness efforts are also crucial in reducing the costs of wildfires. These efforts include fuel management, fire detection, fire education, and fire planning. These activities help reduce the risk of fires starting and spreading, and also help prepare communities for when a fire does occur. Fire mitigation efforts, such as fire breaks, defensible space, building codes, and insurance, also play a crucial role in reducing the cost of wildfires. These efforts help reduce the risk of fires spreading and help minimize damage to property and other assets.

The loss of life, health, property and infrastructure is also a significant cost of wildfires. According to the National Oceanic and Atmospheric Administration (NOAA), the United States experienced 298 billion-dollar weather and climate disasters from 1980 to 2020, of which 19 were wildfires. The total cost of these 19 wildfire disasters was $176.4 billion ($2020 US), with an average cost of $9.3 billion per event. However, these figures do not capture the full losses of wildfires, as they do not include the damages and foregone benefits that are not monetized, such as health impacts, environmental impacts, and social and cultural impacts. Additionally, these figures do not include the losses from smaller or non-declared wildfire events, which can be significant and widespread.

The indirect losses caused by wildfires, such as lost income, lost productivity, lost tax revenue, lost ecosystem services, lost recreation, and lost social and cultural values, are also significant. These losses can have a lasting impact on communities, and can take years to recover from.

In conclusion, the costs and economic impacts of wildfires are complex and multifaceted. They can range from intervention costs, such as suppression and prevention efforts, to losses, such as damages to property, health and the environment. It is important for communities to be prepared for the possibility of a fire, and to take steps to reduce the risk of fires starting and spreading. By doing so, we can help reduce the costs and impacts of wildfires, and ensure a safer and more sustainable future for all.