Damages and costs of forest wildfires in New Zealand using satellite data

Abstract We estimate wildfire impacts on Aotearoa New Zealand forests, focusing specifically on impacts in terms of vegetation recovery and costs. To this end, we use satellite-derived imagery of fire intensity and a vegetation index to measure burn severity and vegetation recovery. We then calculate profitability costs and post-fire remediation and clearing costs, estimated under various wildfire intensity scenarios, to determine the total cost of wildfires. We conclude, maybe unsurprisingly, that forests subject to high-intensity fires take longer to recover than those suffering medium- and low-intensity fires. The economic cost is also higher for higher-intensity fires, averaging 18,000 $/Ha, but due to the small relative share of high-intensity fires, it is the medium-intensity fires that cause the most economic damages in New Zealand. JEL Codes: Q23, Q54