Brendan Byrne , Junjie Liu , Meemong Lee , Yi Yin , Kevin W. Bowman , Kazuyuki Miyazaki , Alexander J. Norton , Joanna Joiner , David F. Pollard , David W. T. Griffith , Voltaire A. Velazco , Nicholas M. Deutscher , Nicholas B. Jones , Clare Paton-Walsh 

2019 was the hottest and driest year on record for southeast Australia leading to bushfires of unprecedented extent. Ecosystem carbon losses due to drought and fire are believed to have been substantial, but have not been well quantified. Here, we utilize space-based measurements of trace gases (TROPOspheric Monitoring Instrument XCO, Orbiting Carbon Observatory 2 XCO2) and up-scaled GPP (FluxSat GPP) to quantify the carbon cycle anomalies resulting from drought and fire in southeast Australia during the 2019–2020 growing season. We find that biomass burning released 113–236 TgC of CO2 while drought and fire-induced anomalies in net ecosystem exchange reduced growing season carbon uptake by an additional 19–52 TgC of CO2. These carbon losses were concentrated during the spring and early summer, when hot-dry conditions were most severe. A shift to cooler conditions with above average rainfall during February is found to result in a partial recovery and greening in unburned ecosystems, but not in fire-impacted areas. The net 2019–2020 carbon loss substantially exceeded interannual variations in net uptake over 2010–2019 estimated from top-down constraints (~5σ anomaly), and exceeded Australia’s annual fossil fuel emissions (~104 TgC year−1). Top-down constraints show that the regional carbon budget is strongly regulated by climate variability, and suggest cool–wet conditions are required for a rapid recovery of carbon stocks. This has implications for the regional carbon budget as more frequent climate-change-driven heat and drought events may increase the frequency of fire events and the recovery time of ecosystems, threatening the carbon stocks of the region.