It has been another unusually mild winter in Europe, with January and February feeling more like the beginning of spring. At the same time, summer in the Southern Hemisphere could not have been more different. Australians experienced the hottest and driest summer on record, surpassing the record highs of previous years. Since the early 1980s temperatures have been steadily rising in Australia, with the annual national mean temperature in 2019 being 1.52 °C above the 1961–1990 average.
These conditions unfortunately gave rise to an unprecedented extreme bushfire season. Fires uncontrollably ravaged through more than 18.6 million hectares of land – roughly twice the size of Ireland – destroying some 6,000 buildings in their wake, taking 34 people’s lives, and killing millions of animals. According to reports, United States space agency NASA said that plumes of smoke from the blaze made a full circuit around the globe. The long-term health impacts of the extended exposure to the smoke-filled hazardous air are yet to be fully understood. And the economic ramifications in terms of health costs, lost productivity, infrastructure damage, and impacts on business and communities are still being felt throughout the economy.
Australia is not the only country grappling with the tremendous challenges of such unprecedented wildfires. In 2018, the Attica Fires in Greece caused nearly 130 deaths and those in Portugal and California over 80 deaths each. Wildfires not only threaten communities, but also cause significant economic disruption, as demonstrated by the California ‘Camp Fire’, which produced economic damages estimated at USD 16.5 billion.
In January 2020, the OECD convened scientists, senior government officials and insurance sector experts for a conference on “Adapting to a changing climate in the management of wildfires”. The group discussed whether what we have seen in recent years is the “new normal” in wildfire risk, and if so, how countries can best adapt to this. Here is what we learned.
- Climate change increases wildfire risk. Whilst wildfires are a natural occurrence and have an important role in maintaining the health of ecosystems, high temperatures and extended drought periods, coupled with difficult-to-predict wind patterns, will greatly increase the occurrence, spread and intensity of wildfires in the future. “Human-induced climate change promotes the conditions on which wildfires depend, enhancing their likelihood and challenging suppression efforts” (ScienceBrief Review, 2020).
- The “new normal” is insufficient to characterise future risk. On the one hand, climate change will continue to exacerbate future extreme fire events. On the other hand, socio-economic developments are equally expected to continue to increase the potential damages fires leave in their wake. In many areas that are prone to wildfires, housing and infrastructure development, as well as industrial activities continue to grow. For example, in the United States, the number of housing units next to or within forested areas, the so-called wildland-urban interface, has grown by 60% since 1990.
- The true costs of wildfires are yet to be fully understood. Large spatial and temporal disruptions to ecosystems, carbon emissions, the long-term health consequences associated with poor air quality, or the social and psychological impact of displacement, are examples of costs we are currently unable to quantify. Without a solid understanding of all direct and indirect costs associated with extreme fires, it is challenging to make the economic case for investing in more preventive policy responses.
- Policy responses are lagging. Countries are facing a daunting task in formulating comprehensive policy responses to the increasing challenges of wildfires, a task that one conference participant compared to “ building an aeroplane while flying”. The current rate of change of the fire problem is overwhelming existing fire management strategies. An illustrative example: in parts of California, the cost of fire insurance for a home has surpassed the cost of the mortgage.
- International cooperation has a key role to play. Countries are keen to learn the lessons from each others’ experience in preparing for, dealing with and recovering from wildfires, especially as the risk and intensity of such fires are increasing. They understand that the type of unprecedented extreme events seen in other countries might soon be what they have to deal with at home. International cooperation brings countries together to enable such peer learning.
Where do we go from here?
It is clear that:
- Urgent measures are needed to better identify wildfire hazard zones.
- Emphasis in wildfire management needs to move away from fire suppression and emergency management responses and instead focus on identifying and investing in effective risk prevention measures.
- Governments need to work with communities and businesses to increase their awareness of risks and encourage investments in individual fire protection measures.
- Finally, insurance and other risk transfer mechanisms can be a tool to limit the financial exposure to wildfire risks, while encouraging preventive action. However, governments and insurance regulators and supervisors will need to ensure that insurers continue to be able to play this role in the context of increasing wildfire risk.
This year’s fire season has served as a stark reminder that we cannot put off adapting to climate change. While the wildfires in Australia might be tamed for the time being, a future of such extreme events very likely lies ahead. As the images from Australia’s summer of fire fade from the media, we need to make sure the sense of urgency for policy reform does not fade as well.
