Forest Fires in Chile: Evaluation of the Economic and Environmental Impact on Natural Capital

Forest fires are caused by intentional action or by natural reasons, and the degree of exposure has been increasing due to the combination of both reasons.Climate change is exacerbating these events.The case of Chile is a good example, intentional factors cause the origin of fires, which are aggravated by heat waves and water stress among other climate-related factors.This document estimates the cost of the 2017 forest fire, which affected 518,174 hectares, being the largest in the recent history of Chile in terms of affected area.The cost of the fire is estimated in terms of natural capital, for plantations and native forest, and the effect on carbon fixation.Considering the replacement cost for plantations at non-productive ages and the potential productive volume for mature trees, losses of natural capital in plantations are estimated at USD$1,046 million.On the other hand, the 68.2 million tons of CO 2 eq emitted by the fire and the 547 million tons of CO 2 eq of capture capacity lost due to the fire, reaching estimated damages of USD$ 2,983 million and USD$ 18,666 million respectively.