Forest Fires in Greece and Their Economic Impacts on Agriculture

Abstract

Forest fires have increased in the last decades, due to many factors such as climate change, land use change and management. In Greece, wildfires burn cultivated lands and affect significantly the rural economy and society. However, the economic impacts of forest fires on agricultural areas has not been estimated, and this is our aim. After an extended literature review and consultation with the stakeholders, we decided to build a model with many variables. The total cost of fire depends on the cost of prevention and suppression measures, and also direct and indirect costs. Direct costs, as adjusted for the immediate effects of fire, are divided into two categories: direct damages instantaneous and direct losses induced. Direct damages are estimated by a function that calculates the instantaneous damage in permanent crops, seasonal crops, livestock, infrastructure, construction and machinery. Direct losses are estimated by a function that calculates fire-induced costs in permanent crops, seasonal crops, livestock, additional borrowing costs and services costs. For the composition of the time-space model, we will use secondary data, as well as data originated from fieldwork. The literature review showed that the ex post analysis involving detailed consultation with a representative sample of affected farms, provides a more consistent appraisal.