Irreversible costs and benefits of transgenic crops: what are they?

Abstract

The decision of whether to release transgenic crops in the EU is one subject to flexibility, uncertainty and irreversibility. We analyse the case of herbicide-tolerant sugar beet and estimate the maximum irreversible environmental cost that can be tolerated for this technology from a benefit-cost perspective. Among Member States, these costs range from an annual € 50 to € 212 per hectare planted to transgenic sugar beet, i.e. in the range of 27-80% of the reversible benefits. It is questionable whether the environmental cost of herbicide-tolerant sugar beet would exceed this threshold.

The Maximum Incremental Social Tolerable Irreversible Costs (MISTICs) and other benefits and costs of introducing transgenic maize in the EU-15

“…One could perhaps think of reversing some of the irreversible effects such as on biodiversity or pest resistance, however, even if that were possible it would not be costless and Demont et al (2005) show an irreversibility effect could still exist.…”

Review: Improving global food security through accelerated plant breeding

“…To look at investments in breeding technology from an economic perspective, it is important to consider both costs and benefits. We make a further distinction between reversible and irreversible benefits and costs [73] (Table 1). Irreversibility means the streams of benefits or costs do not cease after the project is terminated.…”

“…In case the project turns out to be unprofitable, the assets can then be sold off again to minimise the losses. If investment costs are irreversible (such as a greenhouse or molecular laboratory facilities), an investor is inclined to wait a little longer to acquire more information about the benefits [73]. This additional information gives the investors the possibility not to engage in the project if unprofitable instead of cancelling it later and incurring a loss; however, benefits are smaller (foregone) since they are postponed by the waiting period.…”

“…It has been shown that irreversible benefits reduce irreversible costs by the order of one [73]. In other words, while irreversible costs justify postponing a project, irreversible benefits counteract this effect.…”

A socioeconomic analysis of biocontrol in integrated pest management: A review of the effects of uncertainty, irreversibility and flexibility

“…Ideally, a threshold that is tolerable to society for the introduction of biocontrol technology when biocontrol is subjected to flexibility, uncertainty and irreversibility has to be estimated. Demont et al [8] estimated a quasi-option value or maximum incremental social tolerable irreversible costs-MISTICs for transgenic crops from a benefitcost perspective among EU member states. Wesseler et al [34] also applied a similar option model as a decision tool for the introduction of genetically modified (GM) maize in the Europe Union .…”