The following is an adaptation of a keynote address at a conference on addressing wildfires co-hosted by the Turkish Ministry of Agriculture and Forestry and the World Bank on June 16, 2025.
As wildfires burn in the Western United States, Canada, and the Greek Isles, it is crucial to remember two key points. First, whatever you think the costs of wildfires are – to your community, your country, or the planet- it is very likely an underestimate. Secondly, that is why smart investments in prevention and risk reduction are crucial to mitigating the economic, environmental, and social costs that wildfires impose on people and the planet. That doesn’t mean reducing risk to zero, since forest fires will always be a challenge. But we can take action to reduce risk and save lives and livelihoods.
To be clear, those costs are significant and come in many forms. Suppression costs alone can cost a region tens of billions of dollars per year; for instance, Europe spent $42 billion on suppression in 2022. Global insurance claims more than quadrupled in the two full decades from under $10 billion in 2000-2009 to $45 billion in 2010-2019. Global insurance claims this decade could easily surpass $100 billion.
Critically, wildfires that occur in one part of the world affect the price we all pay because they impact the global reinsurance market. Insurers transfer part of their risk to reinsurers to spread out the losses. Global reinsurance costs are the highest they’ve been in 20 years. The German reinsurance market took a nearly $2 billion hit from the wildfires in Los Angeles this year.
The global aggregate costs are significantly higher. A few years ago, a World Economic Forum report on how artificial intelligence can combat wildfires cited a $50 billion annual global cost of wildfires. This figure was provided by disaster modeling company Enki Research, which stated that if just one country experiences a bad year for fires, the total can easily surpass $200 billion in a year. The Palisades fires in Los Angeles from January of this year are projected to cost more than $250 billion, and we’re not even halfway through the year or in the worst parts of the wildfire season in my part of the world.
Arguably, the costs could reach trillions of dollars when all the economic and environmental costs are considered. We know these wildfires devastate communities and also eliminate jobs, economic opportunities, and livelihoods. Stores may never be rebuilt, and local tourism can be severely affected. Children are unable to play outside or even attend school on smoky days. The psychological impacts extend to families evacuating, the mental strain on firefighters battling the flames, and the pain and heartache of realizing that the home you’ve built a family in is gone.
Households and businesses face higher insurance premiums and may lose coverage altogether, leading to decreased real estate values and asset depreciation. Wildfires have a significant impact on human health, disrupt ecosystems, and incur substantial costs to water resources.
Furthermore, wildfire smoke can place a tremendous strain on healthcare systems due to increased exposure to particulate matter, nitrogen oxides, and ozone. Exposure to these pollutants has been linked not only to respiratory illnesses but also to cognitive decline, including dementia. Although the full extent of the effects of wildfire smoke on humans is not entirely understood, globally, it’s estimated that smoke from forest fires is responsible for 5–8 percent of the 3.3 million annual premature deaths — that’s between 165,000 and 264,000 lives lost.
As more epidemiological studies emerge and our scientific understanding deepens, the human cost is likely to rise. Not to mention the broader consequences beyond health: economic and social costs from children being kept indoors or out of school, businesses closing, and communities being broken. Even indoor smoke from forest fires is a problem. According to a new study in Science Advances, more than a billion people worldwide — around 1 in 8 on Earth — were exposed to at least one day of unhealthy air from wildfires annually from 2003 to 2022 while staying inside.
More people are experiencing these costs firsthand. It is not just the families living in wildfire-prone areas. Where I live in Washington, D.C., and where I grew up outside of Philadelphia, the last few days have been hazy due to the recent Canadian wildfires. More than 100 million Americans were under Air Quality Index Alerts due to smoke drift from historic wildfire activity throughout Canada. Now that the smoke has drifted to Europe.
And it’s not just the harms of wildfire smoke, but the increased carbon dioxide emissions. An estimated 20 percent of global greenhouse gas emissions annually can come from wildfires. One destructive fire can undo years or even decades of climate change action. One bad wildfire season can equal the same number of emissions as certain countries. The Canadian fires in 2023 released more CO2 in less than half a year than Russia and Japan emitted from fossil fuels in all of 2022. California’s wildfire season in 2020 wiped out nearly two decades’ worth of the state’s emissions reductions.
I want to underscore that even if the higher risk is relatively small compared to other parts of the world, any year could be your country’s year to have a bad wildfire season, as I’ve said before. We’re not going to stop wildfires from happening. We can’t stop a lightning strike from hitting a forest. And 85-90 percent of wildfires are caused by humans. These human-caused fires often result from activities such as unattended campfires, discarded cigarettes, equipment malfunctions, power line issues, or even intentional arson. This becomes more challenging as populations grow and more people move to wildland-urban interfaces, where human activity and increased development intersect in rural areas. Something like that can happen in your country at the wrong time and in the wrong place.
This is why investing in fire prevention is so critical. Public and private dollars are precious resources, and governments have many priorities to address. For government officials, you must make decisions about budget investments, opportunity costs, and trade-offs. But this is a good investment. Sometimes, the pushback I hear is that wildfire prevention costs too much, but the cost of inaction will be much higher.
And one thing I can’t stress enough. You must be willing to act on these investments and commitments. It’s one thing to secure funding and explore technologies like AI for early detection, but real impact comes from implementation. We already know that we need more prescribed burns, mechanical thinning, and timber harvesting.
But without the right policies in place, these solutions cannot be effectively and efficiently deployed. In the United States, regulations often slow the deployment of forest management and prevention investments. We need policy solutions to take preventative action at the same scale and pace as the wildfires we face every year. In the U.S., the Fix Our Forests Act modernizes policies to help achieve that. By investing in active and innovative forest management, we transform these costs into both economic and environmental benefits.
And it’s going to take all the tools in the toolkit. This shouldn’t be an either/or conversation but a yes/and conversation. That said, we recognize that some tools will have a greater impact than others. In most instances, the most pressing issue for forest managers and communities threatened by wildfires is density and overgrowth, which creates a greater fuel load for fires. Active forest management through prescribed or controlled burns and timber harvesting will significantly reduce the fuel load.
Healthy forests provide many economic and environmental benefits to communities and the planet. If improperly managed, however, America’s forests are an economic, environmental, and public safety liability.
Additional resources for forest management and fire prevention are critical. Still, we need modernized policies and regulations to empower people at all levels of government and in the private sector to manage our forests effectively. That’s going to save lives and livelihoods and turn those millions and billions of dollars of costs into economic and environmental benefits.
The views and opinions expressed are those of the author’s and do not necessarily reflect the official policy or position of C3.