Wildfire smoke is running up our credit-card debt

Americans are increasingly familiar with the many joys of wildfire smoke: stinging eyes, raspy throats, aggravated health conditions, speed-learning the nuances of the Air Quality Index. Now we can add increased credit card debt to the list. It’s the latest evidence that climate change isn’t a deep-future problem but a crisis that’s hurting us physically and economically right now.

A new working paper from researchers at the Dallas and Philadelphia Federal Reserve banks and UCLA Anderson School of Management finds that people exposed to wildfire smoke, even several miles from the source, usually go deeper into credit card debt as a result. They also pay their cards more slowly and fall into delinquency more often. After the 2018 Camp Fire in California, for example, households exposed to smoke 5 to 30 miles away from the fire added an annualized $1,400, on average, to their debt.

This effect tends to be higher closer to the fire, but when heavy smoke is blown hundreds of miles away, the economic cost travels with it. The researchers said their findings suggest, conservatively, that New Yorkers might have taken on an extra $10 billion in credit card debt as a result of the smoke that reached the city from Canadian fires last year.

The main way smoke creates debt is by generating medical bills. Wildfire smoke is about 10 times more harmful to human health than, say, car exhaust. It triggers heart attacks and strokes and complicates pregnancies. It’s particularly hard on people with respiratory health issues, affecting about a third of US households, the paper noted. That 2023 Canadian wildfire smoke, which affected 122 million Americans, boosted asthma-related emergency-room visits alone by 17%, the Centers for Disease Control and Prevention estimated. Many financially struggling families probably put those expenses on their credit cards.

People in smoky areas will also spend extra money on air purifiers, air conditioners and masks. Their income may be affected by job shutdowns and disruptions. All of that creates economic hardship, particularly for people who are already stretched thin. Add to that the destruction wrought by the fires themselves, including California’s insurance crisis, and the macroeconomic impact grows.

And the Dallas Fed paper doesn’t include the expensive, long-term health impacts of breathing toxic smoke, which scientists are still unraveling, as my Bloomberg Opinion colleague Lisa Jarvis has written. These include everything from cancer to dementia to cognitive problems in children. And again, the most economically vulnerable populations suffer the most.

These are problems bound to increase in the future as the planet warms, making the air hotter and drier and raising the risk of more frequent and intense fires. As Jarvis noted, a recent National Bureau of Economic Research paper suggested wildfire smoke alone would take 27,800 US lives a year by 2050.

But climate change has already ramped up wildfire risk, even after just 2.6 degrees Fahrenheit of warming above preindustrial averages in the lower 48 states, by one estimate. In parts of California and the Southwest, wildfire season is two months longer than in 1973, according to a recent analysis by the non-profit group Climate Central. The acreage of US land burned each year has recently been double the long-term average.

To slow this trend, we need to stop burning fossil fuels and making the planet even warmer. While we all hold our breath waiting for that to happen, we must also broaden our idea of public wildfire relief beyond rebuilding houses to include helping people deal with the health-care costs that could accumulate for lifetimes. We must do a better job of educating people about the risks of smoke and protecting outdoor workers from both the pollution and its effect on their paycheck.

And Americans need to finally lose the mistaken idea, which shows up time and again in opinion polls, that fighting climate change somehow conflicts with helping the economy. They are one and the same. The climate emergency is happening now, and fighting it isn’t just environmental policy. It’s economic stimulus.

This column does not necessarily reflect the opinion of the editorial board or Bloomberg LP and its owners.

Mark Gongloff is a Bloomberg Opinion editor and columnist covering climate change. He previously worked for Fortune.com, the Huffington Post and the Wall Street Journal.