How California Wildfires have Hurt the Economy

In South Lake Tahoe, the Caldor Fire raged in El Dorado County but not a single building was burned down. But the damage the small town near the California-Nevada border did suffer was to the local economy, which is estimated to have lost tens of millions of dollars. 

Local businesses were the ones hurt the most. Domi Chavarria is the co-owner of Verde Mexican rotisserie, and was forced to shut down because of evacuation orders. Chavarria lost around $10,000 to $13,000 in lost inventory since much of the food and produce went bad. To make matters worse, the lost inventory was not covered by insurance. It’s estimated that the loss in economic activity in El Dorado County added up to $50.3 million according to CalMatters, a large number especially for a county that is mostly rural. Another issue is that the Caldor Fire happened during Labor Day weekend, and about 63% of the Lake Tahoe economy is in tourism. 

Since the Caldor Fire, the California government has been criticized for its lack of understanding and planning when it comes to wildfires. Governor Newsom has been scrutinized over his wildfire policy which many attribute to being one of his downfalls that lead to a recall vote. The state right now does not have any way to calculate the costs of business disruptions associated with wildfires, “Right now, we don’t have a comprehensive picture of the economic harm wildfires cause each year” says Teresa Feo who was the lead author of a 2020 report on the cost of wildfires in California, “There isn’t a statewide systematic tracking effort to figure out these costs”.  An initial analysis conducted by Tom Harris at University of Nevada, Reno estimated that the combined losses of El Dorado County and Nevada’s Douglas County was $93 million. Harris said that that number is a low estimate as they did not include costs associated with residents evacuating or healthcare costs caused by the wildfires such as smoke inhalation. 

We have seen a number of times that wildfires can have a devastating effect on local areas. But while initial concerns are about the local environment, the state has failed to realize the massive damage it does to the economy of those areas. 

Photo Cred: Sara Nevis/ Sacramento Bee