The Growing Threat of Climate Disasters

Across the world, the devastating impacts of climate change are being felt more acutely than ever before. From violent storms to record-breaking droughts, these climate disasters are reshaping our environment and economies. The World Meteorological Organization (WMO) reports that climate-related events have caused almost $1.5 trillion in economic losses between 2010 and 2019, a dramatic rise from $184 billion in the 1970s. These extreme events are not only increasing in frequency but also in severity, fueled by global warming and the failure to take sufficient action.

Floods, droughts, hurricanes, and wildfires have become more common, putting human lives, infrastructure, and entire ecosystems at risk. The damage is not confined to any one region—whether it’s the floods that ravaged parts of Europe or the persistent droughts plaguing Africa, the economic and environmental toll continues to rise.

As the Intergovernmental Panel on Climate Change warns, these disasters are expected to grow even more frequent and intense in the coming years. The future cost of inaction is daunting, not just in economic terms, but in terms of lost lives, displaced communities, and degraded ecosystems. While the world grapples with these immediate threats, the need for effective, scalable solutions to build resilience and adapt to climate change has never been more urgent.

Wildfires Fueling Climate and Economic Destruction

Wildfires are rapidly becoming one of the most destructive and alarming natural disasters of our time. Fueled by rising global temperatures and prolonged droughts, these fires are growing in both frequency and intensity, devastating vast areas of forest, wildlife habitats, and human communities.

According to recent data from the World Meteorological Organization (WMO), wildfires, once considered seasonal events, are now occurring year-round in various regions. The economic toll is staggering, with losses reaching billions of dollars annually. In the U.S. alone, wildfires caused over $150 billion in damages between 2018 and 2022, and this figure is only expected to rise as climate change accelerates.

Beyond the immediate destruction, the environmental consequences of wildfires are severe. Fires release massive amounts of stored carbon back into the atmosphere, significantly contributing to global greenhouse gas emissions. In a vicious cycle, the carbon released by these fires further amplifies global warming, increasing the likelihood of more frequent and intense fires in the future. The destruction of forests, which act as carbon sinks, not only accelerates climate change but also threatens biodiversity, as countless species lose their habitats and struggle to survive in the aftermath.

The economic and human costs of wildfires are escalating as communities around the world struggle to adapt. The recovery process is slow, with rebuilding efforts often hampered by the ongoing threat of future fires. As these disasters continue to grow in scale, the urgency for comprehensive wildfire management strategies and stronger climate action becomes even more critical.

Wildfires and Carbon Markets: A Growing Risk

The rising frequency and intensity of wildfires are not only reshaping landscapes but also casting serious doubts on the future of the carbon offset market. As discussed in the previous chapters, wildfires have become one of the most devastating climate disasters, but their impact goes far beyond immediate destruction. These fires pose a unique threat to forest carbon offset projects—initiatives designed to sequester carbon through reforestation or preventing deforestation. While these projects have been critical in the fight against climate change, the increasing wildfire risks threaten the very foundation of their effectiveness.

Forest carbon offset programs work by planting trees or preserving existing forests, allowing them to absorb CO2 from the atmosphere. This absorption is converted into carbon credits that businesses and governments purchase to offset their emissions. However, recent wildfire events in areas like the United States and Europe have burned through these offset projects, releasing the very carbon they were meant to store.

For example in 2021, Oregon's Bootleg Fire destroyed a large portion of the Klamath East Project, releasing over 3 million metric tons of carbon into the atmosphere. Similar incidents across the globe have shown that wildfires can negate years of environmental progress in a matter of days.

The volatility of forest-based carbon credits raises critical concerns about their long-term reliability. Projects registered under the California Air Resources Board (CARB), for example, are required to allocate a percentage of their credits into a “buffer pool” to insure against losses from wildfires and other disasters. However, studies have shown that this buffer system is already under immense pressure. Approximately 95% of the wildfire buffer credits have been exhausted in less than a decade, despite being designed to last a century. With wildfires projected to increase by as much as 50% by the end of the century, these buffer systems may not be sufficient to protect the integrity of the carbon market.

As more businesses rely on carbon credits to meet their net-zero goals, the financial and environmental risks associated with these projects grow. For example, major companies have seen carbon credits they purchased go up in flames just months after acquisition, forcing them to either repurchase offsets or face potential reputational damage.

The increase of wildfires demands more robust solutions within the carbon market. While mechanisms like buffer pools and shorter-term carbon offsets have been introduced to mitigate risk, they are far from perfect. Buyers and investors need to conduct more thorough assessments of wildfire risks before engaging in carbon offset projects. Companies such as Orbify, are offering tools to better understand the long-term risks associated with offset projects increasing their credibility and premance.

How Orbify Can Help Carbon Buyers Safeguard Their Investments from Fire Risks

As wildfires become more frequent and destructive, the reliability of forest carbon offset projects is being called into question.

For carbon buyers, this escalating threat raises critical concerns: how can they be certain that their investments in carbon projects won’t literally go up in smoke?

Orbify offers a solution to this challenge with its advanced fire risk assessment tools powered by satellite data, helping buyers make informed decisions and protect the integrity of their carbon credits.

Fire Risk Assessment for Carbon Projects

Orbify’s fire risk assessment tool provides a comprehensive analysis of wildfire risks. Using the Fire Weather Index and historical fire data, Orbify identifies high-risk areas, helping carbon buyers invest in projects less likely to experience fire-related carbon loss.

The tool retrieves historical fire danger indices, which include meteorological factors like temperature, humidity, and fuel moisture content. Over the past decade, these indices are aggregated to provide a cumulative fire risk assessment. The risk is then categorized into low, moderate, or high levels, offering clear insights into the likelihood and severity of potential fire incidents. Finally, a numerical score is assigned to quantify fire risk, enabling informed, strategic decisions for fire management and mitigation.

This systematic approach empowers stakeholders to proactively address wildfire threats and implement targeted preventive measures.

Protecting Carbon Investments for the Long Term

By using Orbify’s fire risk assessment, carbon buyers can make smarter, more resilient investments in carbon projects assuring the premance of their carbon offsets. The platform identifies high-risk areas by offering satellite-data-driven insights to help manage these risks effectively. For investors looking to meet net-zero goals or comply with emissions regulations, ensuring the security of carbon credits is critical. Orbify gives them the confidence to invest in projects that will deliver real, lasting climate benefits.

If you’re ready to safeguard your carbon investments and make sure your contributions to offsetting emissions stand the test of time, try Orbify’s Climate Risk platform today.

Connect with our experts for a personalized consultation and protect your carbon credits from future fire risks.