Quantifying disaster

January 20, 2017

Economics profs report first findings in total cost of Fort McMurray wildfires

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Dr. Rafat Alam and Dr. Shahidul Islam, both economics professors, recently released the findings of their rapid economic impact analysis of the Fort McMurray wildfires.

Until now, estimated costs from organizations including the Conference Board of Canada, have been between $5 and $6 billion. But those estimates only include direct costs—things like losses of public and private property, labour income and production in the oilsands.

Rafat and Shahidul’s estimate is much higher—currently at $8.86 billion—because it focuses on direct and indirect costs, which are also more difficult to identify, quantify and value.

“We have also tried to count some of the indirect costs like mental health, environmental losses, losses in timber values and impact on health ,” explains Shahidul. “There are all kinds of different implications of a disaster like this—physical and psychological—that eventually contribute to economics.”


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While this initial assessment is further evidence that this is the costliest natural disaster in Canadian history, it’s a number that both researchers agree is likely to continue to change. It could take up to a decade to create a solid understanding of what happened economically, and to calculate a more accurate number.

“The full impact of disasters isn’t something you can see right away,” says Shahidul. “More and more data is available as time passes.”

As that data surfaces through research conducted at other universities and gathered by governments and organizations—including studies into the health impact on groups of people like firefighters and women in early pregnancy—the researchers will continue to refine and update their estimate.

“We will keep collecting data and revisit the estimates throughout this whole year ,” says Rafat. “Continuing to update will give us an idea of how much the numbers have changed and evolved over time.”

In the meantime, they will submit the results of their rapid impact assessment for publication this summer. Four MacEwan alumni and current students who used their expertise in biology, sociology and economics to assist Shahidul and Rafat with their research will be included as co-authors on the paper.

Going forward, the researchers say they will likely choose to focus their studies on a particular impact area. One possible topic is something they haven’t yet been able to analyze in full detail—the quantification and monetization of the fire’s impact on the ecosystem and environment.

“This impact assessment will help better manage natural resources in the wake of more frequent forest fires in the future,” says Rafat.



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