Economic cost of wildfires: expert explains

"Europe's wildfires this year confirm that their economic cost reaches far beyond restoring burnt land. The eventual bill will include destroyed homes, businesses and crops, disrupted tourism and industry, smoke-related health effects, added strain on public finances and potentially higher insurance premiums.

Europe's fires have mainly struck forests, scrubland, pasture and farmland, though several have reached towns and peri-urban areas. The Los Angeles fires of January 2025, by contrast, tore through densely populated, high-value neighbourhoods, producing far greater property and insured losses. That gap could narrow as European development pushes further into fire-prone terrain.

Australia, South Africa and India all show that firefighting alone cannot contain wildfire risk. Effective prevention needs vegetation management, controlled burning where appropriate, firebreaks, rapid satellite detection, trained local teams, landowner co-ordination, evacuation planning and building standards that resist embers and heat.

The UK should treat southern Europe as an early warning. This summer's heatwaves and wildfires in southern England, which have already burnt more than 20,000 hectares, show that fire risk is no longer confined to the Mediterranean. Priorities should include national wildfire-risk mapping, better management of heathland and forests, restrictions during extreme-risk periods, resilient infrastructure and tighter planning controls near combustible landscapes.

Insurers may reassess UK wildfire exposure as European losses mount. A publicly supported “Fire Re” scheme (a wildfire equivalent of Flood Re) is not currently under formal consideration in England and would be premature unless wildfire causes widespread withdrawal or unaffordability of household insurance. Nevertheless, policymakers should begin examining possible mechanisms before such a protection gap emerges.”

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