Irreversibility, Uncertainty, and the Adoption of Transgenic Crops: Experiences from Applications to HT Sugar Beets, HT Corn, and Bt Corn

This study applies a real option approach to quantify, ex-ante, the maximum incremental social tolerable irreversible costs (MISTIC) that would justify immediate adoption of HT and Bt corn in the European Union (EU). The results are compared with previous ones for HT sugar beets. In total, according to our analysis, the BU gives up about €309 million on average per year due to the quasi moratorium on transgenic crops for Bt corn, HT corn, and HT sugar beets alone. On the other hand, the MISTIC per household and year for Bt corn, HT corn, and HT sugar beets is €0.27, €0.46, and €1.10, respectively, or €1.83 for all three crops. The low MISTIC provides a strong economic argument for prohibiting the immediate introduction of the three transgenic crops. The validity of the argument will largely depend on consumer attitudes towards transgenic crops.

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