Twelve years ago, economist Ross Garnaut made a prophecy that has devastatingly come true.

Key points: The insurance damage bill from the bushfires that began in September has risen to $700 million

The insurance damage bill from the bushfires that began in September has risen to $700 million Conservative estimates put the final cost well into the billions of dollars

Conservative estimates put the final cost well into the billions of dollars Australia's tourism industry could suffer, health costs could spike and there are warnings about more climate-related litigation

In the 2008 Garnaut Climate Change Review, which examined the scientific evidence around the impacts of climate change on Australia and its economy, he predicted that without adequate action, the nation would face a more frequent and intense fire season by 2020.

Speaking to the ABC about the latest bushfires and the potential economic fallout, Professor Garnaut refrained from taking a direct shot at policymakers who ignored many of the review's calls for action.

But he noted: "If you ignore the science when you build a bridge, the bridge falls down."

"If you ignore the science when you build a plane, the plane crashes."

The initial damage bill from Australian bushfires that began in September has risen to $700 million, according to Insurance Council of Australia estimates, and is likely to grow.

ICA's Campbell Fuller told ABC News that 1,838 homes have been destroyed across Australia since September and there have been 8,985 insurance claims for fire-related damage and destruction.

But insured losses are just a small part of wider economic losses.

The total cost of the 2009 Black Saturday bushfires was estimated at $4.4 billion.

Conservative estimates put the final cost of the current Australian bushfires well into billions of dollars, while some analysts say it could cost the economy $20 billion in lost output.

Economist says cost could hit $3.5 billion

The head of economic analysis at SGS Economics and Planning, Terry Rawnsley, has done some early estimates on the economic cost of the bushfires.

Based on previous modelling of the Tathra fires in 2018, and taking account of $700 million worth of insured losses, the economic fallout from the latest fires could be as high as $3.5 billion, he said.

Between $2 billion to $3 billion includes the direct costs to fire-affected regions such as the loss of tourism and retail income, and the impact on agricultural production.

He predicts that some of the worst-affected communities will never fully recover.

And smoke haze in major capital cities could be an additional $500 million drag on the economy.

"These are places not directly impacted by bushfires, but people aren't out and about, and people are calling in sick with respiratory and asthma illnesses," he said.

Smoke haze in major capital cities including Melbourne could be an additional $500 million drag on the economy, says SGS Economics. ( ABC News: Cathy Jacobs )

Mr Rawnsley said while SGS Economics had modelled the loss of income from livestock such as sheep and cattle being destroyed, it had not modelled the actual loss of the assets (the loss of the sheep and cattle itself).

Professor Tom Kompas, one of three chief investigators in the Centre of Excellence for Biosecurity Risk Analysis (CEBRA) at the University of Melbourne, said the economic cost of the bushfires would be "massive".

He said he intended to do precise modelling on the impact later this month.

Other bushfire insurance losses (normalised to 2017 dollars): Black Saturday (2009): $1.76 billion

Black Saturday (2009): $1.76 billion Ash Wednesday 1983 (Vic, SA, NSW): $2.46 billion

Ash Wednesday 1983 (Vic, SA, NSW): $2.46 billion Canberra 2003 bushfires: $839.4 million

Canberra 2003 bushfires: $839.4 million Victorian Alpine Bushfires 1985: $854 million (Source: Insurance Council of Australia)

His earlier research on economic impacts of climate change had predicted $1.2 trillion in cumulative damages from now to 2050 assuming a global temperature increase of 3.8-4C by 2100.

But the $1.2 trillion in losses looks at infrastructure lost due to sea-level rise, losses in agricultural and labour productivity and limited human health and biodiversity impacts.

"It does not include the cost of bushfires on infrastructure and resulting increases in insurance premiums," he said.

"It also does not include damages from human health effects due to pollution and smoke-related illnesses, losses in tourism, losses to major environmental assets … or the costs of emergency management, recovery and relocation."

Estimated $20 billion could be wiped off GDP

AMP Capital chief economist Shane Oliver estimated a reduction of between 0.25 and 1 per cent in the level of national economic output as a result of the fires, which he forecast would show up mostly in the March quarter.

Based on Australia's gross domestic product (GDP) of about $2 trillion, a 1 per cent drag could equate to about $20 billion.

Still, even a lesser 0.25 per cent hit would be a major drag on economic growth, in an already slowing economy.

"The economic costs will clearly run into billions of dollars," Dr Oliver said.

Everyone would pay to some degree via higher premiums as insurance claims spiked, he said.

AMP's Shane Oliver says growth from rebuilding efforts will not become apparent until the June quarter or even later in the year. ( Facebook: Buchan Caves Hotel )

And while the Federal Government's $2 billion cash injection was helpful and would assist rebuilding efforts, he said this lift in growth would not become apparent until the June quarter or even later in the year.

Economists at JP Morgan said in a research note that the immediate impacts on GDP remained hard to identify, but there would be a cost based on disruption to infrastructure and productive capital.

It said the Grattan Institute estimated that 80 per cent of Australia's GDP comes from 0.2 per cent of its land mass (generally its most densely populated areas), while major bushfires mostly occur "in non-productive, non-residential, and non-cleared land".

JP Morgan said there also could be "temporary offsetting positives to GDP", for example, excess hours worked by public servants, increased outlays by charitable organisations and government transfers.

Domestic and international tourism to take a big hit

Tourism Australia was reluctant to provide early economic estimates, with a spokesman saying the organisation was still gathering feedback from industry and monitoring impacts on future bookings.

But he said based on past severe weather events and natural disasters, "tourism is an extremely resilient sector".

Australian Tourism Industry Council (ATIC) executive director Simon Westaway estimated the cost to the tourism industry could be hundreds of millions of dollars.

He said it was too early to know the exact cost, as there could be a six to nine-month lag.

Tourism losses as a result of the fires are estimated to be in the hundreds of millions of dollars. ( ABC News: Danny Tran )

The bushfires have impacted many parts of Australia during the peak of the holiday summer period, and could also hurt international inbound tourism due to global media coverage of the fires.

"We're getting early indications people are cancelling their bookings," Mr Westaway said.

"A number of our members are getting enquiries from Europe, with people asking whether it is safe to travel here [to Australia] three months down the track."

According to data released by Tourism Research Australia in December, Australia welcomed more than 9 million overseas visitors in 2018-19, and the total spend by domestic tourists and international visitors was $146 billion.

Tourism is Australia's fourth-largest export earner (behind iron ore, coal and natural gas), contributing $39.1 billion to Australia's economy in 2018–19.

GDP from all tourism was $60.8 billion in 2018-19, an increase of 6 per cent on 2017–18.

"It [tourism] is a major industry and perception is really important," Mr Westaway said.

More than 1 billion animals may be affected

Professor Chris Dickman at Sydney University has estimated more than 1 billion mammals, birds and reptiles may be affected by the bushfires.

He told the ABC that animals had been killed either directly by the flames, or could be killed indirectly by the lack of food, water and shelter resources in the burned environment, as well as predators such as feral cats and red foxes.

WWF-Australia chief executive Dermot O'Gorman said this heart-breaking loss included thousands of koalas on the mid-north coast of NSW, along with other iconic species such as kangaroos, wallabies, gliders, potoroos, cockatoos and honeyeaters.

The WWF also noted other losses including that of pollinators such as bees, moths and other insects, and the loss of trees.

WWF noted loss of pollinators such as bees would have a detrimental impact. ( ABC News: Carl Saville )

"Many forests will take decades to recover and some species may have tipped over the brink of extinction," Mr O'Gorman said.

There are also more emissions being released into the atmosphere from the bushfires themselves.

A spokeswoman for the CSIRO told the ABC: "As the fires are still burning across vast areas of Australia, an accurate analysis of the total carbon dioxide emissions released from the bushfires is not possible."

Health impacts and climate-related litigation could rise

Dr John Iser from Doctors for the Environment, a group of medical professionals concerned about the health impacts of climate change, also said it was hard to predict the economic cost of the latest bushfires.

He said air pollution had risen above hazardous levels in many states, "but we really won't know the outcome of all the recent pollution exposure for some months".

"The particles in smoke get through to the bloodstream and there are other chemical compounds that are harmful for people who are prone to asthma and cardiovascular disease," he said.

Dr Rebecca Patrick, co-lead of the Health Sustainability Research Group at Deakin University, predicted the start of a new decade could see the rise of climate litigation.

She expected more human rights and environmental justice lawsuits to be filed against fossil fuel companies and high-emission sectors.

The risk of climate-related litigation is something Australia's financial regulators have been warning about for a number of years now.

The Reserve Bank of Australia, the Australian Prudential Regulation Authority and the Australian Securities and Investment Commission have also cited risks posed by climate change as a major concern for the economy and financial stability.

Professor Garnaut is reluctant to put a dollar figure on the latest bushfire catastrophe.

"Any quantitative estimates just scratch the surface," he said.