Biodiversity Versus Transgenic Sugar Beet: The One Euro Question

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 reassess whether the 1998 de facto moratorium of the EU on transgenic crops for sugar beet was correct from a cost-benefit perspective using a real option approach. We show that the decision was correct, if households value possible annual irreversible costs of herbicide tolerant sugar beet with about 1 € or more on average. On the other hand, the total net private reversible benefits forgone if the de facto moratorium is not lifted are in the order of 169 Mio € per year.

Keywords: uncertainty, irreversibility, biotechnology, sugar beet, social costs, EU

JEL Classification: D61, D62, D81, N50, O33, Q16, Q32

Accepted Paper Series