Experts uncover hidden financial consequences of natural disasters: 'There's clearly disruption in the near term'

Wildfires in the United States since 1980 have increased in frequency and size, burning 1.8 million acres every year from 2003 to 2021. These wildfires are impacting communities, the economy, and our environment. 

Marketplace interviewed Raphaelle Gauvin-Coulombe, an economics professor at Middlebury College, on how fires are affecting the economy.

What's happening?

"There's clearly disruption in the near term. That, almost, is obvious, right?" David Brancaccio asked Gauvin-Coulombe.

He agreed, noting that in response to wildfires, labor forces shrink as people move and businesses need fewer workers, especially in the service and tourism industries. 

Gauvin-Coulombe explained that "we do find effects that last about three years after the fires. And we do find that an increase in fire exposure leads to a decline in employment growth."

However, areas affected by wildfires that receive a Federal Emergency Management Agency disaster declaration and federal aid are much better off. Gauvin-Coulombe said that "it's able to offset the effect on both employment and migration."

The uneven economic impact of fires

Wildfires can displace middle-class families and worsen the economic divide. The Guardian reported that though the wealthiest 10% of people cause up to 40 times more carbon pollution than the poorest 10%, poorer people are far more impacted by the overheating climate. 

After fires, people in the middle and lower classes often struggle economically and spend less on nonessentials. A lack of aid after a fire worsens the situation, leaving many people struggling with increased insurance premiums and unaffordable rental housing.

What you can do to fight the impacts of these fires

Individuals can do their part in fighting the overheating of our planet through education and action, but historically, sustainable upgrades such as electric vehicles and solar panels have been too expensive for many people.

Luckily, EVs are being made more efficiently, and the prices of these high-tech cars have dropped and will likely continue to fall. 

Do you worry about air pollution in and around your home? Yes — always 💯 Yes — often 😷 Yes — sometimes 😟 No — never 🙅 Click your choice to see results and speak your mind.

Across the country, solar panels are becoming cheaper and more accessible, and government incentives have reduced installation costs. Consumers can help the environment and save themselves enormous amounts of money in the long run by going solar.

When it comes to wildfires, there are efforts to educate the public on how to prevent them in areas heavily impacted by droughts, which are increasing in frequency and intensity because of the changing climate. People should properly extinguish campfires, keep up on vehicle maintenance, and practice fire-safe target shooting. 

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