Forests of India are burning at an alarming rate amid the changing climate patterns and amplified human interventions. The fires are degrading forests, threatening biodiversity, and accelerating desertification. While the immediate physical devastation includes loss of vegetation, property, and human life, which is visible and often quantified, the wider economic repercussions of wildfires remain insufficiently examined and underrepresented in policy discussions. Recognising the far-reaching consequences of forest fires highlights the urgent need for a comprehensive economic assessment to guide effective management strategies and the prudent allocation of resources.
According to the Forest Survey of India (FSI), an alarming 34,562 sq km of forest cover, an area exceeding 1% of India’s total landmass, was consumed by fires from November 2023 to June 2024. This ecological crisis poses a significant threat to India’s national mission for ‘Green India’. While the number of recorded fire incidents has shown a recent decline, dropping from 2,23,333 in 2021–2022 to 2,03,544 in 2023–2024, the long-term trend remains a cause for grave concern.
India’s annual mean temperature has climbed from 25.05°C in 2001 to 25.74°C in 2024, marking a significant warming trend over the past two decades. The country is witnessing an extreme spate of heatwaves stretching from southern (Odissa) to central (Madhya Pradesh) and northern (Himachal Pradesh) parts. These hotter, drier conditions have made forest blazes a new normal.
The forest fire devastation extends beyond environmental damage to significant economic losses, estimated at INR 1.74 lakh crore annually. According to an assessment of the Forest Protection Division of the Ministry of Environment and Forests, Government of India, 3.73 million hectares of forests are affected by fires annually in India. The estimated average annual tangible loss due to forest fires in the country is INR440 crore, though this figure likely underestimates the true economic impact. These economic impacts are mapped using policies such as economic valuation and payment for ecosystem services.
Ecosystem-based services from forests represent a fundamental shift from traditional Pigouvian policy approaches, recognising that not all forest ecosystem services are public goods, deserving of government intervention. The importance of these services lies in their diverse economic and environmental contributions, which necessitate innovative policy frameworks that move beyond conventional regulatory mechanisms. The significance of ecosystem services is underscored by the potential for market-based interactions between sellers and buyers concerning payments for ecosystem services (PES). Within this, forest landowners serve as providers while buyers may include actual users, governments, NGOs, or international agencies acting on behalf of constituencies that value or utilise these services. This market-oriented approach recognises the multifaceted nature of forest benefits and creates opportunities for voluntary transactions that can more effectively capture the true value of ecosystem services. Ecosystem services add substantial economic value annually. The assessed services values accounted for the regulatory services such as carbon sequestration, soil protection, and recreational services from the main protected areas in the Western Ghats, and are estimated to be worth US$ 612 million per year.
Within the comprehensive framework of forest fire management, climatic parameters are indispensable; the role of local communities is no less crucial. Recognising the tangible economic benefits derived from forests, as opposed to merely abstract environmental arguments, serves as a powerful incentive for communities to engage in fire-prevention initiatives. Furthermore, empowering communities through robust participatory institutions, such as Van Panchayats and Joint Forest Management Committees (JFMCs), is a proven strategy for significantly bolstering forest-fire preparedness.
While robust methodologies for assessing the economic impact of wildfires are well-established in regions like Europe and Korea, a comprehensive framework remains conspicuously absent in India. Economic assessment represents a fundamental component that should be mandated across all forest management frameworks (national and sub-national frameworks), enabling strategic prioritization of fire prevention investments based on economic risk exposure. Current data reveal that approximately 4% of India’s forest cover is susceptible to extreme fire, while an additional 6% demonstrates very high fire vulnerability. This alarming exposure necessitates substantial investment in research and development to indigenise economic modelling frameworks specifically calibrated for forest fire impact evaluation, incorporating region-specific ecological dynamics and socioeconomic parameters. However, significant implementation barriers persist, including fragmented policy coordination, inadequate community engagement mechanisms, and the absence of standardised protocols for carbon quantification and economic valuation methodologies.
Every year, millions of hectares of India’s precious forests go up in flames, releasing tons of stored carbon back into the atmosphere. India urgently needs standardised methodologies to assess the total economic impact of forest fires, including direct costs, ecosystem service losses, and long-term economic consequences. Economic evaluation should be mandatory in all forest management plans to help prioritise fire prevention efforts in economically vulnerable areas. Creating payment mechanisms for ecosystem services that incentivise local communities to prevent fires becomes critical. When people get incentivised for protecting forests, they become the most effective guardians for the forested area.
Moving forward, India must invest in developing country-specific economic models for forest fire impact assessment that account for local ecological and economic conditions. However, significant challenges remain, including policy inconsistencies, inadequate community engagement, and the absence of standardised methods for measuring and valuing carbon emissions from forest fires.
The question isn’t whether we can afford to invest in comprehensive forest fire management, it’s whether we can afford not to.
The views expressed are the author’s own.