$244 billion a year: The cost of Canadian wildfire crossing borders across US?

Time of India

05-06-2025

If any Canadian import should be tariffed out of existence, it's one that President Donald Trump couldn't tax even if he wanted to: wildfire smoke. Unfortunately, it's a product in increasing and borderless abundance across North America and the world, endangering lives and inflicting billions of dollars in economic damage every year.
In fact, a new study suggests wildfire smoke is a bigger threat to American health and prosperity than many other climate-change effects combined.
In recent days — almost exactly two years after Canadian smoke made breathing difficult across a wide swath of the US from Chicago to New York — another huge cloud of the stuff has invaded the Lower 48, spoiling air quality from North Dakota to South Carolina — and, again, Chicago and New York. Some of it even crossed the Atlantic to Europe. The risk of more incursions will linger for several days, with 202 active fires stretching from British Columbia to Ontario as of this writing, 104 of which were out of control.
by Taboola
by Taboola
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It's no fluke this has happened in two of the past three years. The heat from a relentlessly warming planet has made wildfires more frequent and intense (and weird) around the world. Along with a century of wildfire suppression and increasing human incursions into the wildland-urban interface, this has turned wildfire season into a year-round event in the US, and no longer limited to the far West.
'It's remarkable how quickly this risk is changing and how many people are affected in places historically not affected by this risk,' Marshall Burke, an associate professor at Stanford University, told me in a Zoom call with Marissa Childs, an assistant professor at the University of Washington. 'Ten years ago, it was only in the West. Now everyone is accustomed to it.'
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The acreage of US land burned by wildfires has doubled in the past 20 years, according to the National Interagency Fire Center. And in each of the past five years, Americans in the contiguous US have been exposed to at least twice as much wildfire smoke-related fine particulate matter (known as PM2.5) as they were between 2006 and 2019, according to a preprint study by Childs, Burke and other researchers.
'There's no part of the US that won't experience wildfire smoke eventually,' Childs said. 'Even if there are small parts of the country not impacted recently, they will be at some point.'
All this smoke has undone decades of progress in cleaning the air Americans breathe by lowering pollution from factories, power plants and automobiles. Some researchers have suggested wildfire smoke is far more toxic than those other pollution sources. As my Bloomberg Opinion colleague Lisa Jarvis has written, wildfire smoke hurts much more than just lungs, raising the risk of everything from dementia to premature births.
Burke was involved in a new working paper for the National Bureau of Economic Research, led by Minghao Qiu, an assistant professor at Stony Brook University (who also worked on the PM2.5 preprint), trying to measure the economic damage of this novel and growing danger to human health. Their findings are alarming in at least a few ways.
For one thing, they estimate that global heating of 3 degrees Celsius above preindustrial averages — the path the world is currently traveling — will lead to 46,200 extra deaths from wildfire smoke every year in the US, doubling the rate from 2011 to 2020. And each of those deaths represents an economic loss. In yet another NBER paper last year, the prolific Qiu, Childs, Burke and other colleagues estimated those smoke deaths would cause $244 billion in annual US damage by 2050.
What's also surprising is that most economic models haven't yet incorporated the health risks of wildfire smoke into estimates of what's known as the 'social cost of carbon.' This is a dollar amount economists assign to the damage done by each additional ton of carbon dioxide pumped into the atmosphere, further warming the planet. The Environmental Protection Agency's social-cost-of-carbon model takes a stab at including smoke-related mortality, Qiu told me in a phone call, but uses antiquated wildfire data and so underestimates damage by a factor of seven.
Each additional ton of carbon we pump into the atmosphere, thus warming the planet, will lead to enough wildfire smoke to do roughly $15.10 in US economic damage,the new NBER paper suggests. This may not sound like a lot, but multiply that by roughly 40 billion tons of global CO2-emissions each year, and very quickly you're talking real money.
In fact, deaths from wildfire smoke alone could be at least as economically destructive as every other factor cranked into most social-cost-of-carbon models, Qiu noted — suggesting most previous estimates of the damage of climate change have been too low by about 100%.
Even these larger estimates are still undercounting. They don't measure the hit to labor productivity when people struggle to breathe, along with the medical costs of asthma, heart attacks, strokes, premature births and more. A 2024 working paper from the Dallas and Philadelphia Federal Reserve banks and the UCLA Anderson School of Management found wildfires drive up credit-card debt for people living many miles from the flames, thanks to higher health costs.
And, of course, we haven't even mentioned the damage wildfires keep inflicting on the struggling home-insurance industry, as the Los Angeles fires exposed this winter.
A recent study by researchers at the University of Chicago Booth School of Business and the University of Pennsylvania's Wharton School used the EPA's social-cost-of-carbon measure to suggest US corporate emissions will do $87 trillion in economic damage by 2050. In light of this new paper, maybe corporate America actually owes us $174 trillion.
While we wait for those checks, we'll have to be smarter about wildfires and smoke. We could start by quitting fossil fuels. A tariff of sorts to recoup some of this damage, in the form of a carbon tax, would be helpful. But even if we did all that tomorrow, fire risk would keep increasing for decades because of the heat already in the system. Better forest management, including controlled burns, can help mitigate that risk, as can moving humans out of the wildland-urban interface.
Meanwhile, public officials must do a better job of warning people of the dangers of smoke and make breathing centers, high-quality face masks and HEPA filters available to everyone who needs them. The Canadian smoke that invaded the US two years ago caught everybody by surprise. We're not in much better shape today.
'Not enough has been done to prepare,' Childs said. 'While in the longer term we need to think about how to manage forests and climate change, in the short term we need to protect people from exposure. That includes not relying on people to protect themselves.'
We literally can't afford to be so unprepared anymore.