The January 2025 Los Angeles wildfires attracted the attention of the world as they burned out of control for more than a week. While their cause and full costs are not yet known, it is clear from the direct death toll of 25 and a recent estimated total cost of USD 250 billion, that they will be one of the most destructive fires in U.S. – and global history.
The LA fires destroyed over 18,000 buildings and burned 40,588 acres. In contrast in 2014, a series of fires in the North-West Territory of Canada burned 8.6 million acres, killed nobody and cost CAD 55 million to extinguish with very little damage to buildings. The damage figure is low because the forests were so remote they were considered to have no economic value and property loss was minimal.
Wildfires are a growing threat
In the last 10 years global damage from wildfire has increased significantly, but it varies a lot from year to year – see data viz below. Climate change has brought warmer temperatures, and induced shifts in precipitation patterns that can lead to periods of drought. These have increased the risks of wildfires.
Year-to-year variability also reflects where fires start and spread, with fires that are close to larger cities being more likely to have a bigger economic cost and higher deaths; especially if they spread quickly when winds are strong. In Los Angeles, Lahaina (2023), and Attica (2018) the large number of deaths resulted from a combination of large amounts of dry vegetation, high winds and initial fires that started close to population centres.
Crucially, a large wildfire is generally made up of multiple distinct fires that each require containment. Multiple fires complicate both firefighting efforts, and evacuation processes when the fires are near cities.
Wildfires are often shaped by human behaviour
Unlike earthquakes, hurricanes, droughts, or other major natural disasters, wildfires are often caused by people, either through failure of electrical equipment, the accidental spread of a campfire, or through arson. More people have increasingly placed themselves at risk by building and living in close proximity to natural environments that are prone to fires.
Proximity risks are made worse when homeowners do not fireproof their residences by using fire resistant materials, like metal roofs, or when they allow brush and other vegetation to build up near their home.
Wildfires causing the most deaths and economic damage in OECD countries tend to burn near, and in, urbanised areas.
Three of the four major wildfires that killed the most people were in urban areas where suburban homes were built in high fire risk locations. Both the 2018 Camp Fire, 85 deaths, and the 2025 Los Angeles fires, 25 deaths, burned over 18,000 structures. Insured losses from the Camp Fire were USD 12 billion, and a preliminary insured loss estimate of the Los Angeles fires is USD 35-45 billion. An exception is the 2009 Black Saturday fires in Australia that were mainly in less populated areas and led to 180 deaths and 3500 structures destroyed, with AUD 1.2 billion in insured losses.
Major Wildfires in the last 75 years – direct deaths, area burned, estimated damage and cause
Only some wildfires are forest fires
A large share of major fire events burn land that has a variety of vegetation types. In Australia, California, and southern Europe brushy vegetation is the main type of vegetation. In these places, shrubs, bushes, and grasses are the dominant fuel for wildfire. These fires burn quickly and can expand rapidly when winds are strong because the woody fuel ignites and burns rapidly. In Europe, a contributing factor to the growth of wildfires is the abandonment of farmland that has reverted to brush.
True forest fires mainly occur in more remote and temperate areas where there are fewer settlements and fewer farms. Deaths in true forest fires tend to be mainly firefighters who become trapped in the fire zone, as was the case in the 1949 Landes forest fire in France, which remains the largest single wildfire in Europe. Major wildfires in remote rural areas burn the largest areas and release the most CO2 and other emissions. This reflects the difficulty in fighting a fire where there are few or no roads and firefighters.
Wild fire damage can be reduced
In Los Angeles the current set of fires burned both newer housing developments in the urban fringe and established neighborhoods that had existed for multiple decades. While older housing is inherently more susceptible to burning because of the way it was built, many newer homes are not built with fire resistant materials because building codes often do not require “fireproofing” in high risk locations.
Removing combustible vegetation from around homes also leads to a reduced risk of burning. In urban areas deaths can be high when a limited number of evacuation routes quickly become impassable as multiple fires break out, or if fires spread quickly due to high winds. As the risk of fires increases greater investments in firefighting capacity and in fire detection technologies will also limit damage.
What can policy do?
We know wildfires are becoming more common and that this trend is likely to continue. In peri-urban areas, the severity of wildfires, both in terms of death tolls and financial losses, often stems from fires breaking out simultaneously in multiple locations. Fires can also expand quickly if there are too few firefighters for the number of blazes. Homes in fire prone areas are often not required to be built with fireproofing in mind, and there are too few resources currently allocated to brush clearing to reduce fuel build-up.
The appropriate policy responses are to increase the number and capability of local fire fighters, and develop better coordination mechanisms that can enhance responses. If home insurance premiums fully reflected fire risk and any efforts to reduce it, there would be much stronger incentives for homeowners to invest in better materials and to better manage fuel on their property. Similarly, local governments should allocate more money to clearing fuel from public lands, especially in places where fires have broken out previously.
In more remote areas, where the major impact will likely be CO2 emissions and other air quality effects, the major challenge is early detection and quick response to contain the fire to reduce emissions. Here technology such as satellite imagery and sensor networks can play an important role in early detection.
Fighting these fires is often best done using aerial approaches, with the equipment for firefighting staged at a sufficient number of appropriate locations so that there is capacity to reinforce a group where the fire is large. These fires are more likely to be the responsibility of a national government or a group of states of provinces in a federal system.
For deeper insights, see the OECD report Taming Wildfires in the Context of Climate Change.
David Freshwater is professor emeritus at the University of Kentucky. When he retired he was the H.W. Price Professor of Agricultural Policy in the Department of Agricultural Economics, and held additional appointments in the Martin School of Public Policy at the University of Kentucky, and the Department of Geography at Memorial University in Newfoundland and Labrador. He main areas of expertise are Agricultural Policy and Economic Development Policy in Rural Regions. He has been a consultant on these topics with the OECD since 1993 and was Head of Unit for the Rural Programme in 2009. He also served as a member of the professional staff of the United States Senate Committee on Agriculture, Forestry and Nutrition, and as a senior economist for the Congressional Joint Economic Committee. From 1996 to 2001 he managed TVA Rural Studies, a large rural research programme jointly sponsored by the Tennessee Valley Authority and the University of Kentucky. In addition, he has worked with number of Canadian federal and provincial government departments on agricultural and rural policy issues.