How Does Wildfire Risk Affect the Economy?

Wildfires have become more prevalent in western states, which puts not only fields and forests, but homes and businesses in danger. What type of financial impact will the increasing number of wildfires, and to a larger extent climate change, have on the economy? Watch our video to find out.

What type of impact will the increasing number of wildfires in western states have on the economy? Our video delves into the importance of understanding how climate change affects our economy’s future. (video, 1:13 minutes).


Massive wildfires have become more common in Western states.

Made worse by rising temperatures and more erratic rain.

Wildfires affect more than fields and forests.

They carry a grave cost. Lives are lost. Homes and businesses are damaged

And people can suffer long-lasting health issues.

Because millions of people live and work in regions that are prone to wildfires, the threat has expanded.

Larger fires destroy neighborhoods, businesses, and entire towns.

The cost of providing relief to residents, preventing and fighting fires, and helping regions recover are high, putting a strain on local and state budgets.

Wildfires are one visible result of climate change.

Wildfire costs are likely to create long-term financial and economic impacts, so understanding wildfire risk will be key to understanding how climate change will affect the future economy.

The San Francisco Fed recognizes the importance of such climate-related risk to our economy—it’s an issue we can’t afford to ignore.

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The views expressed here do not necessarily reflect the views of the management of the Federal Reserve Bank of San Francisco or of the Board of Governors of the Federal Reserve System.