What exactly caused the surprising difference between the quiet 2023 fire season in the United States and Canada’s record fire season? Let’s take a look.
(CNN) — Wildfires caused by climate change are costing the U.S. economy between $394 billion and $893 billion a year, according to a new Congressional report, a shocking more than double the estimate in previous government reports. It is a number.
A new report from the Joint Economic Committee, chaired by Democratic Sen. Martin Heinrich of New Mexico, looked at a wide range of costs beyond immediate wildfire damage, including the impact on property values. Early mortality and health risks from wildfire smoke. Threats to watersheds. and loss of income. This report was first shared with CNN.
The scope of Heinrich’s committee was adjusted for inflation and looked at lesser impacts, a Trump administration report that found the annual cost of wildfires to be between $87.4 billion and $427.8 billion. Significantly more expensive than the book.
“The top-line numbers are scary,” Heinrich told CNN. “Even if you live in a place where wildfires have never been a problem before, these numbers are large enough to become a systemic problem for the economy.”
Heinrich and his staff examine the cascading economic costs of wildfires, including impacts that last long after the fires are extinguished, and explain why lawmakers and officials should actively invest in resilience efforts. He said he wanted to make a point.
The McBride Fire burns in Ruidoso, New Mexico on April 12, 2022. (Ivan Pierre Aguirre/USA Today/Reuters)
“There’s always been a feeling from some policymakers that we can’t afford to do anything about climate change,” Heinrich said. “And the reality is that the real cost to our economy is that by doing nothing about this problem and leaving it as is, we’re going to end up with worse outcomes in the future.”
Declines in U.S. real estate values account for by far the largest portion of total costs. The report estimates that wildfires cause between $67.5 billion and $337.5 billion in damage to real estate annually. By comparison, the report estimates that insurance claims for wildfire losses will be $14.8 billion a year, increasing annual premiums by about $1.6 billion.
But the figures are also uncertain because the impact on the real estate market is only just beginning to be understood, external experts said.
“There’s a lot of uncertainty, and that’s to be expected,” said Ed Kearns, chief data officer at the nonprofit First Street Foundation. However, they are not involved in this report. “The insurance industry is making adjustments, so it’s continuing to evolve as we speak. We don’t know exactly what those will end up being yet.”
Disaster experts warn that the United States is on the brink of further economic fallout from wildfires and real estate. Home insurance prices have soared in fire-prone California, and some insurance companies have stopped writing new policies after more destructive fires.
There’s also evidence that the new insurance crisis is already having an impact on home prices, says David, former California Insurance Commissioner and director of the Climate Risk Initiative at the Center for Law, Energy and Environment at the University of California, Berkeley.・Mr. Jones stated.
Homeowners who have had to pay higher insurance premiums may find it more difficult to sell their homes. Homebuyers also have to factor higher premiums into their monthly payments, assuming they can get insurance, reducing the amount of home they can buy.
“If you’re a homebuyer, it’s natural to have questions like, how much does it cost to insure this place? Can I get insurance?” Jones told CNN in a recent interview. If the answer is that insurance is very expensive and difficult to get, then the homebuyer is saying, “This house isn’t worth that much, so I won’t pay that much for this house.” “It will be,” he added.
Kearns agreed, noting that federally backed mortgage giants Fannie Mae and Freddie Mac have seen some California insurers remove fire coverage from policies or not issue new policies at all. He said that he is starting to pay attention to things like:
“It wasn’t on their radar at all. Floods were the main cause of default,” Kearns said. “Now that insurance companies are separating, Fannie and Freddie have changed their tune.”
The parliamentary report also takes into account the impact of wildfires on drinking water. This was not measured in the last federal report, but the issue has become even more important as the West faces a drier future. In recent years, wildfires have contaminated nearby streams and rivers that supply water to communities, threatening to dry up drinking water in some areas.
When massive wildfires burned through northern New Mexico last year, the muddy ash and charred soil they left behind slid into the Gallinas River, threatening the drinking water supply of the city of Las Vegas, New Mexico. With fresh water remaining for just weeks before additional supplies can be found, city officials are hoping for federal grants for improved water treatment systems that filter out tiny pollution particles and make the water safe to drink. Was.
Heinrich said the watershed costs identified in the report are “huge.”
“Regions like Mora and Las Vegas have had to figure out how to provide clean drinking water to their residents after the fires, but how expensive clean water really is and how dependent it is on infrastructure. You’ll see,” Heinrich said.
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