Economic losses and cross border effects caused by Pantanal catastrophic wildfires

Abstract The Pantanal, the Earth's largest continuous wetland, experienced severe impacts from wildfires in 2019 and, particularly, in 2020. The surge in wildfires can be attributed to several factors, including climate extremes, inadequate fire management, ineffective policymaking, as well as commercial and demographic dynamics. Understanding the economic effects of wildfires is crucial for guiding resource allocation toward prevention, firefighting efforts, and policymaking. This study aims to examine the economic losses resulting from the catastrophic wildfires in the Brazilian Pantanal region during 2019 and 2020. By utilizing new publicly available datasets and data obtained from representatives of institutions, we constructed scenarios to simulate the fire's impacts on the economic input-output system. Through the application of structural impact analysis, we were able to verify an impact in MS GDP of -0.79% and MT had an impact of -0.98% resulting from fire damages. The industries impacted most were livestock, wholesale and retail trade, electricity, gas, and other utilities, agriculture, other food products, land transportation, and slaughtering and meat products. The impact of fire per square kilometer burned reaches 10 thousand dollars in MS. Our findings reveal that the economic impact of the wildfires extends beyond the burned areas, affecting other states of Brazil, such as São Paulo and Paraná.