The Environmental Benefits and Costs of Genetically Modified (GM) Crops

Abstract

The widespread introduction of genetically modified (GM) crops may change the effect of agriculture on the environment. The magnitude and direction of expected effects are still being hotly debated, and the interests served in this discussion arena are often far from those of science and social welfare maximization. This chapter proposes that GM crops have net positive environmental effects, while regulatory responses focus mainly on environmental concerns, giving an unbalanced picture of the regulatory context. This unbalance supports the hypothesis that environmental concerns about GM crops have been politically instrumentalized and that more attention should be paid to regulatory responses considering the environmental benefits of this technology. It is also argued that a number of environmental effects have not yet been quantified and more research is needed in this direction.

Full text

CHAPTER 7
The Environmental Benefits and Costs
of Genetically Modified (GM) Crops
Justus Wesseler
a
, Sara Scatasta
b
and El Hadji Fall
c
a
Center of Life and Food Sciences Weihenstephan, Technische Universita
¨tMu
¨nchen,
Weihenstephaner Steig 22, 85354 Freising, Germany
E-mail address: justus.wesseler@wzw.tum.de
b
Rural Development Theory and Policy, Universita
¨t Hohenheim, Wollgrasweg 45, 70593
Stuttgart, Germany
E-mail address: scatasta@uni-hohenheim.de
c
UNDP, 5 Boulevard de l’Est, Point E, Dakar, Senegal
E-mail address: el.hadji.fall@undp.org
Abstract
The widespread introduction of genetically modified (GM) crops may
change the effect of agriculture on the environment. The magnitude and
direction of expected effects are still being hotly debated, and the interests
served in this discussion arena are often far from those of science and
social welfare maximization. This chapter proposes that GM crops have
net positive environmental effects, while regulatory responses focus mainly
on environmental concerns, giving an unbalanced picture of the regulatory
context. This unbalance supports the hypothesis that environmental
concerns about GM crops have been politically instrumentalized and that
more attention should be paid to regulatory responses considering the
environmental benefits of this technology. It is also argued that a number
of environmental effects have not yet been quantified and more research is
needed in this direction.
Keywords: Biodiversity, environmental cost-benefit-analysis, externalities,
genetically modified crops, pesticide use
JEL Classifications: O32, Q16, Q18, Q28, Q5
1. Introduction
The cultivation of agricultural crops has effects on the environment,
including changes in the pollution of water resources due to changes in
Frontiers of Economics and Globalization r2011 by Emerald Group Publishing Limited.
Volume 10 ISSN: 1574-8715 All rights reserved
DOI: 10.1108/S1574-8715(2011)0000010012

pesticide or fertilizer use, changes in biodiversity and agrobiodiversity,
changes in the emission of greenhouse gases (GHGs) through cultivation
of soils and burning of fossil fuels, and changes in soil erosion by wind
and water.
The introduction of genetically modified (GM) crops is changing the
environmental footprint of agriculture. Early concerns about substantial,
negative implications for the environment from GM crops (Krimsky and
Wrubel, 1996;Kendall et al., 1997) have not been confirmed, but have
triggered a number of regulatory responses and are one of the major
reasons put forward by the EU (EU Environment Council, 1999) for its
quasi moratorium on genetically modified organisms (GMOs) as well as
the implementation of the Cartagena Protocol on Biosafety to the
Convention on Biological Conservation. The economic implications of
these concerns are far-reaching and complex. Some authors have argued
that these measures are not so much generated out of concern for the
environment, but are rather due to fear of ‘‘Big Pharma’’ (Winston, 2002)
and are embedded in the political economy of regulation (Graff et al.,
2009) or international public and private aid (Paarlberg, 2008;Herring,
2009), where environmental concerns are instrumentalized to achieve
other objectives.
While environmental concerns around the introduction of GM crops
have been partially addressed and assessed in several reviews (see, e.g.,
Fontes et al., 2002;Mellon and Rissler, 2003;Benbrook, 2009), the
literature providing an overview of the actual and potential benefits of
GM crops is sparse. A notable exception is the National Research
Council Report (2010), but the report concentrates on U.S. agriculture.
With this chapter we want to fill this gap and address different kinds
of environmental affects, paying attention to the benefit side of the
story.
In this contribution we will focus on a number of effects of GM crops
on pesticide and fertilizer use, on the emission of GHGs, and on soil
erosion as well as agrobiodiversity and biodiversity. Special attention will
be paid to the environmental benefits of herbicide-resistant (HR) crops,
about which some recent studies have shown greater environmental
benefits than mentioned in earlier studies. We show that many environ-
mental benefits have not yet been assessed from an environmental
economics point of view and argue that environmental economists should
start paying more attention to the strong evidence available on the
environmental benefits of GM crops, in order to improve the regulatory
understanding of this technology.
The contribution is organized by first establishing the theoretical
framework in Section 2.Section 3 presents and discusses the evidence
on environmental benefits of GM crops. In Section 4, the environ-
mental issues are discussed in the wider policy context of new
technologies.
Justus Wesseler et al.174

2. Theoretical framework for assessing the environmental benefits
of GM crops
Environmental impacts have socioeconomic, temporal and ecological
dimensions. From a socioeconomic point of view, such impacts can be
broadly categorized based on whether they are private or external. When
impacts are private, their socioeconomic value will be captured in market
transactions, and technology adoption will be at the social optimum. The
same might not hold for externalities, the presence of which can be seen as
an effect of market failure that justifies government intervention aimed at
reaching the socially optimal amount of technology adoption, as has been
the case with GM crops.
Environmental impacts have a temporal dimension: they can be short
term or long term, actual or potential, and reversible or irreversible. As
technology adoption also has a temporal dimension – it can be immediate
or postponed – the temporal dimension of environmental impacts plays a
key role in technology adoption decisions and regulatory responses
(Mooney and Klein, 1999;Morel et al.,2003;Demont et al., 2004;Ervin
and Welsh, 2005;Wesseler et al., 2007;Wesseler, 2009).
Environmental impacts have an ecological dimension characterized by
the environmental media (soil, water, air, climate, vegetation, and biota)
and the ecological function (regulation, habitat, production, and
information) affected (de Groot et al., 2002). Changes in GHG emissions,
for example, can affect the climate regulating function. Changes in
insecticide and herbicide use can have an effect on soil productivity and the
regulation function of vegetation and biota.
Environmental impacts of agrobiotechnology adoption are caused by
changes in agronomic practices and cropping systems through input
substitution or changes in input use efficiency. In particular, an increase in
input use efficiency may yield a conversion of saved resources to other uses
(Kalaitzandonakes, 2003). In this respect, environmental impacts of
agriculture biotechnology can be considered to be direct when stemming
from input substitution or changes in input use efficiency. Indirect impacts
of the technology derive instead from the conversion of saved resources to
other uses.
Further, the chain of agricultural biotechnology development is
important. The public and the private sectors invest resources in the
development and use of knowledge to produce agricultural crops with new
traits. Those new crops are sold to farmers who plant them and sell the
harvest to the downstream sector, which further manufactures the
products until they finally reach the end consumer via retailers. Important
feedback mechanisms are needed to be included in this chain. Consumers,
often via advocacy groups, send signals via retailers about their food
preferences back to the farm sector as well as directly to technology
providers, who also receive them from the farm sector as well.
The Environmental Benefits and Costs of GM Crops 175

Additionally, information between agents in the chain influences whether
and how a new GM crop and derived food products will be successfully
introduced and, hence, their environmental impact.
The rules and regulations that national governments and international
organizations use to govern the release of GM crops also influence the
behavior of agents within the chain and, consequently, environmental
impacts. Such rules and regulations do not appear out of the blue; in fact,
they are made by humans who act in their own interest. The political
economy of deciding about rules and regulations adds another dimension
of complexity, making the issue inherently dynamic (Kealey, 1998;
Shleifer, 2010).
Despite the complexity and dynamics, looking at the environmental
benefits and costs of GM crops at the farm level and investigating welfare
implications in a comparatively static way is a good starting point and will
help to clarify a number of issues that are also relevant for assessing the
empirical evidence regarding environmental benefits and costs.
Assessing environmental benefits and costs can best be done by
differentiating between private and external ones as well as differentiating
between irreversible and reversible ones (Mooney and Klein, 1999;
Demont et al.,2004;Ervin and Welsh, 2005;Wesseler et al., 2007).
Within a competitive market, along the supply chain – including
technology providers and farm-level producers on the supply side and
processors, retailers and final consumers on the demand side – the marginal
benefits of GM crops are derived from the sum of the individual willingness-
to-pay, while the marginal private costs of supply are derived form the sum
of the individual supply. The difference between marginal private benefits
and marginal private costs result in the net marginal benefits (NMB).
Environmental benefits and costs not yet internalized (e.g., via regulations)
by private behavior are considered to be external. The social marginal net
benefits (SMNB) of GM crops are the sum of the individual marginal
benefits and costs. The social marginal externality can either be positive or
negative, depending on the GM crop and the externalities considered.
In most cases where a new GM crop is planted, it does not fully
dominate existing non-GM crops and some non-GM crops may still
continue to be cultivated. There are several reasons, the main one being
that a GM variety may not provide additional benefits for all growers of a
crop. For example, European Corn Borer-controlling Bt maize varieties
will provide additional benefits in areas where the pest is a problem, but
not in others (Goldberger et al., 2005;Wesseler et al., 2007). Another
decrease of benefits occurs when a market for non-GM crops emerges with
a price markup (Hurley et al., 2004a, 2004b) as demonstrated by a number
of consumers studies (Rousu et al., 2007;Dannenberg et al.,2009),
signaled via labeling (Scatasta et al., 2007;Gruere et al., 2009), and
realized for products such as milk from cows raised with non-GM feed
(MVS Milchvermarktungs GmBH, 2009).
Justus Wesseler et al.176

Assessment of the environmental benefits and costs of GM crops needs
to consider that non-GM crop production also has external environmental
benefits and costs. Further, most of the external effects of agricultural
production are internalized through a number of policies, such as
regulations on pesticide use, fertilizer use, and so on (Oskam et al.,
2010). This internalization does not imply that the environmental costs of
non-GM agricultural production are zero, but rather that they are close to
the social optimal level when ignoring dynamic aspects.
1
This has
implications for assessing the environmental benefits and costs of GM
crops: firstly, the additional external benefits and costs of GM crops in
comparison to non-GM crops should be considered when assessing
whether or not an environmental effect should be considered a benefit or
cost. This is a nontrivial issue in the debate about the regulation of GM
crops, as the discussion about HR crops illustrates (Bonny, 2008; see also
Section 3). Another implication is that external costs of GM crops do not
per se justify a ban on them, if social welfare maximization is the objective.
If the external costs of the GM crop are higher than those of the non-GM
crop, a ban might be considered, but an alternative to a ban might include
specific regulations addressing the externality, such as refuge areas to
control the buildup of pest resistance. Decisions about optimal regulatory
responses should depend on comparison of the benefits and costs of
alternative strategies to address externalities (Arrow et al., 1996;Coase,
2006). Furthermore, in cases where GM crops reduce external effects, i.e.,
provide an external benefit, subsidizing the introduction of GM crops
might be justified. As Section 3 seeks to demonstrate, this is exactly what
the empirical evidence is suggesting.
3. Environmental benefits and costs of GM crops
When GM crops were introduced in the mid-nineties, a number of
concerns were raised regarding their environmental safety (Krimsky and
Wrubel, 1996;Kendall et al., 1997). By and large, however, until now the
net environmental effects of GM crops have been considered to be
positive. A range of environmental benefits have been identified for GM
crops, including positive effects on input use, indirect effects on
ecosystems, and effects on GHG emissions, which will be discussed in
the following sections. The most important, but least assessed, indirect
effect on the environment that we start with here is that on land use
through gains in productivity, measured in yield per hectare.
1
It may be debatable whether or not current regulations sufficiently address externality issues.
This will differ country by country, region by region. But what can be said is that the marginal
net benefits of non-GM crops are, among other things, a result of responses by producers to
the regulatory environment they face, including regulations addressing environmental issues.
The Environmental Benefits and Costs of GM Crops 177

3.1. Yield effects of GM crops
The adoption of GM crops has the potential to reduce inputs such as
inorganic fertilizers and pesticides (Bennett et al., 2004a, 2004b). GM
crops with resistance to insects and herbicides can substantially simplify
crop management and reduce crop losses, leading to increased yields (e.g.,
Pray et al., 2002, 2011;Nickson, 2005). Such yield increases due to GM
crops can also have positive land-use effects, often reducing pressure on
protected land, in particular, in countries where the enforcement of
regulations is weak.
Increased resistance to fungal and viral diseases expected from future GM
crops are expected to result in further efficiency advantages compared to
non-GM crops. Development of GM technology to introduce genes
conferring tolerance to abiotic stresses such as drought or inundation,
extremes of heat or cold, salinity, aluminum, and heavy metals are likely to
enable marginal land to become more productive and may facilitate the
remediation of polluted soils (Czako et al., 2005;Uchida et al., 2005). The
multiplication of GM crop varieties carrying such traits may increase
farmers’ management possibilities and capacities to cope with these and
other environmental problems (Dunwell and Ford, 2005;World Bank, 2007;
Sexton and Zilberman, 2011). Therefore, GM technology holds out further
hope of increasing the productivity of agricultural land (FAO, 2004).
Using a Ricardian rent model, Brookes and Barfoot (2009) calculate
substantial productivity gains for GM corn, cotton, oilseed rape, and
soybeans. Similarly, Qaim (2011) reports substantial productivity gains
from GM crops at the global level as well as their important contribution
toward food security.
While the productivity gains reported thus far are substantial and
positive welfare effects have been identified, assessments regarding
implications for land use and, in particular, habitat conservation have
been lacking. In many developing countries, habitat loss is related to the
need for additional land for agriculture production, resulting in wetlands,
rainforests, and other protected areas being converted for crop produc-
tion. Such pressure on valuable habitats is directly linked with
demographic and socioeconomic development. Demographic development
puts pressure on agricultural land to increase the supply of food in certain
regions. While, in general, there is enough food being produced worldwide
to nourish the world population, the unequal distribution of food supply
and food demand creates pressure on important habitats in regions where
food supply remains particularly scarce (United Nations, 2008). Socio-
economic development puts pressure on agricultural land to adapt the
quality of food supply to higher standards of living (e.g., higher supply of
foods with a higher protein content, such as meat) and to meet the ever-
rising demand for new sources of energy. Pressure on agricultural land
increases the opportunity cost of land uses other than agriculture,
Justus Wesseler et al.178

translating into a threat for those uses not directly contributing to
economic activities, such as natural habitats. Reducing this pressure
requires, on the one hand, improvements in the distribution of food supply
and increased food production in areas where food supply is extremely
scarce, on the other. Increasing agricultural productivity is key to reducing
pressure on habitats for two reasons: first, while redistribution of food
may help to cope with an increase in population level, it will only partially
address the demand for higher living standards, including changes in the
demand for certain foods, such as rising demand for meat per capita;
second, with the world population increasing by about one-third by 2050
(doubling in Africa), the number of undernourished people expected to be
about 600 million by 2015 (United Nations, 2008), and world energy
demand increasing 50% by 2030 (Energy Information Administration,
2009), increasing the carrying capacity of agriculture (the number of
people being fed by one hectare of land) has become indispensable and a
key issue for sustainable growth.
For the past 12 years, GM plants have increased outputs per hectare.
While most of the genetically engineered crops being produced, such as
HR soybeans and most of the Bt corn, have been used as feed within
animal production, some crops, such as Bt corn or soybean oil, have
increased the amount of food being produced per unit of land in key
regions such as Southern Africa and parts of Latin America (Qaim,
2009). Additionally, increasing efficiency in feed production with
genetically engineered crops may help to increase animal production
without increasing pressure on natural habitats. In any particular case,
the impact on the overall area needed for feed production will depend on
the size of the efficiency gain relative to the increase in demand for animal
products.
The same line of argument holds for the production of cotton and other
GM crops. Bt cotton, for example, has lowered production costs for
cotton and led to increased amounts of cotton produced per unit of land.
This increase in efficiency reduces the amount of land needed for the same
amount of cotton, but it also increases the competitiveness of cotton with
respect to other crops, thereby increasing the amount of land allocated to
cotton. Again, the net effect on the overall area allocated to cotton is an
empirical question, depending on the size of the efficiency gain relative to
an increase in the demand for cotton.
In both cases, if the demand for the final product is such that the
demand for the input (crop) to production is highly elastic, the overall land
used for agricultural production of such an input may stay the same or
even decrease. As a result, GM crops can contribute toward a reduction in
pressure on natural habitats from agricultural land uses. The existence and
magnitude of this contribution is an empirical question which has not yet
been addressed. However, the evidence on productivity gains summarized
by several authors (Brookes and Barfoot, 2009;Qaim, 2009;Carpenter, 2010;
The Environmental Benefits and Costs of GM Crops 179

Pray et al., 2011) indicate that such benefits are present and can be
expected to be quite substantial.
While increases in productivity can generate substantial indirect benefits
which have not yet been adequately addressed quantitatively, the direct
environmental implications of changes in pesticide use induced by GM crops
have been relatively well studied, as we demonstrate in the next section.
3.2. Pesticide use effects of GM crops
Pesticides in agriculture are used to control pests and nontarget plants.
The reduction of pesticide applications is a major direct benefit of GM
crop cultivation: reducing farmers’ exposure to chemicals (Hossain et al.,
2004;Huang et al., 2005) and lowering pesticide residues in food and feed
crops, while also releasing less chemicals into the environment and
potentially increasing on-farm diversity in insects and pollinators
(Nickson, 2005). Additionally, pest resistance through the protection
genetic engineering confers can reduce the level of mycotoxins in food and
feed crops (Wu, 2006).
Although decreased pesticide use has emerged as one of the most
important direct impacts of GM crops on the environment (Kleter and
Kuiper, 2005), the problem of how to measure this impact has still not
been solved. One commonly used indicator is the Environmental Impact
Quotient (EIQ), which includes the impact of pesticides on the
environment, on farm workers, and on consumers. Application of the
EIQ to HR soybeans indicates an overall positive environmental impact
from them over non-HR soybeans. In a review, Kleter et al. (2007)
compare conventional and GM oilseed rape in the United States,
calculating that for the GM variety the application of pesticide active
ingredients was 30% lower, the total EI per hectare was 42% lower, the
ecological impact was 39% lower, and the farmer impact was 54% lower.
Brookes and Barfoot (2008) use the EIQ methodology to compute and
compare EIQ values for conventional and GM crops at the national level,
finding that EIQ values decreased by 15.4%. In their analysis of HR
canola in North America, the amount of active chemical ingredients
applied to canola decreased by 7.9 million kg, or 12.6%. As Smyth et al.
(2011a) note, the study by Brookes and Barfoot assumed that the highest
application rate was used in all instances, creating the potential for an
overestimation of active ingredient application and thus underestimating
the decline in usage and the net overall benefit.
Recently, Gusta et al. (2011) and Smyth et al. (2011a, 2011b) investigated
the environmental effects of HR canola in Canada, the adoption of
which has changed weed control practices. Farmers’ have shifted from
2
The EIQ has been weighted with the application rate and the area (Smyth et al., 2011b).
Justus Wesseler et al.180

soil-incorporated to foliar-applied postemergent herbicides. A majority of
the farmers, more than 60% of the respondents, also reported a simplification
of weed management using HR canola. As a result of these changes, the
environmental impact of canola production in Canada – calculated based on
a modified EIQ
2
– dropped by 59% between 1995 and 2006.
While the EIQ has been used in many studies, it, as well as other
indicators, has some shortcomings that are addressed by Kleter and Kuiper
(2005). The EIQ does not, for example, consider temporal aspects, which
can be important for measuring phenomena such as the effect on water
reservoirs of a continuous use of glyphosate on HR crops or changes in
insecticide use caused by pest resistance. Such long-term effects also pose
problems for environmental risk assessment in general (European Food
Safety Authority [EFSA] Panel on Genetically Modified Organisms, 2010).
Concerns have been raised in the literature about the control of volunteer
canola (e.g., Ellstrand, 2001). According to the study by Smyth et al. (2011b),
only 8% of the HR canola-growing farmers mentioned volunteer canola as
a problem and ranked it either fourth or fifth after other weed problems.
Of those 8%, only 35% reported that additional effort to control volunteer
canola was needed, supporting previous results by Beckie et al. (2006)
and the Serecon Management Consulting (2005) that canola volunteers are
not a serious problem in general. Nevertheless, 9% of the respondents
reported an increase in yield loss caused by volunteer canola over a 10-year
period from 1995 to 2006, but control costs for volunteer canola have been
calculated to be less than C$3 per hectare (Gusta et al., 2011).
Another concern is the selection pressure caused by intensive use of
glyphosate on nontarget flora. Glyphosate resistance has recently been
reported for Amaranthus palmeri (Gaines et al., 2010). Until 2007, 13
glyphosate-resistant (GR) weeds had been reported worldwide (Service,
2007) posing a medium- to long-tem threat on the use of HR technology
(Bonny, 2008). As weed-resistant pest resistance has become an emerging
issue and resistance of pests to toxins expressed in Bt crops have been
reported for a number of cases (Frisvold and Reeves 2010). Frisvold and
Reeves (2010) has pointed out, however, that the emergence of weed as
well as pest resistance can potentially be addressed by appropriate crop
management strategies.
Wu et al. (2008) report for China a two- to seven-fold suppression of the
cotton bollworm population in areas where Bt cotton has been introduced
since the late 1990s. This suppression has not only reduced pest damages in
non-Bt cotton fields as well as other crops damaged by the cotton
bollworm, but also resulted in a host-preference change of the cotton
bollworm (Jongsma et al., 2010). Kuosmanen et al. (2006) report that Bt-
cotton planting farmers in China do not necessarily give up the use of
insecticides completely. One reason for this might be that of seed quality,
as has also been reported for India (Herring, 2009), or the problem of
secondary pests, as mentioned by Pemsl et al. (2008) and recently reported
The Environmental Benefits and Costs of GM Crops 181

on by Lu et al. (2010). Similarly, Carrie
`re et al. (2003) report suppression
of the pink bollworm by Bt cotton in Arizona. The implications of target-
pest suppression for resistance management and pest management in
general are not yet well understood and need further investigation
(Carrie
`re et al., 2003;Jongsma et al., 2010).
Whether the suppression of pest damages in non-Bt cotton fields has
changed pesticide use on other crops – as reported for the cases of HR
canola (Gusta et al., 2011) and HR soybeans (Brookes and Barfoot, 2009)–
has not been mentioned by Wu et al. (2008).Gusta et al. (2011) have
measured the spillover benefits of HR canola cultivation on herbicide
applications of the following crop. While such benefits had already been
mentioned in the report of Serecon Management Consulting (2005), the
authors of this newer study were able to quantify them. Fifty four percent
of the respondents reported a spillover benefit worth about C$37 per
hectare, with a calculated average annual benefit between about C$12 and
C$20 per hectare of HR canola in Canada, meaning overall between C$67
and C$110 million for the 2007 crop.
3.3. Fertilizer use and GM crops
Fertilizer is used in agricultural production to increase yields and crop
quality by providing plants with three major nutrients: nitrogen,
phosphorus and potassium. Secondary nutrients such as calcium and
magnesium, or micronutrients such us iron, zinc and copper may also be
provided, but in this section we focus on impacts of GM crops on nitrogen,
phosphorus and potassium use and use efficiency while simplification in
management practices may also result in lower on-farm fuel consumption.
Fertilizer can be divided into two broad categories: organic and
inorganic. The former is composed of organic matter derived from animals
or plants, while the latter is composed of chemicals or minerals derived
from nonrenewable resources.
The type and amount of fertilizer applied on agricultural fields strongly
depends not only on soil and crop characteristics, but also on economic
factors, such as fertilizer prices. While in Western Europe and the United
States the fertilizer application rate is about 250 kg/ha, it amounts to only
73 kg/ha and 9 kg/ha in Latin America and in Sub-Saharan Africa,
respectively (Molden, 2007). Although fertilizer use has increased
enormously in the past five decades – U.S. fertilizer use in 2007 was 200
times higher than in 1960, according to data from the USDA (2009) –
fertilizer demand is expected to increase even further. Tenkorang and
Lowenberg-DeBoer (2008) forecast a global increase of fertilizer demand
in 2030 to levels 1.5 times higher than in 2005.
Such an increase is a source of great concern, due to expected associated
negative impacts on air, water and soil quality (Tilman et al., 2002).
Justus Wesseler et al.182

Fertilizer use, organic and inorganic, may increase GHG emissions,
eutrophication in water bodies, pollution of drinking water and soil
acidification. Especially Nitrogen-rich compounds have been found to
play a very important role in generating these effects.
Environmental impacts and damage costs from synthetic nitrogen in
Europe have been investigated by von Blottnitz et al. (2006), who estimate
damage costs due to global warming caused by N
2
OandCO
2
emissions
from fertilizer production and N
2
O emissions from fertilized agricultural
field to be in the order of 0.3 h/KG
N
(i.e., 60% of the current fertilizer
market price).
Based on contingent valuation studies eliciting the willingness-to-pay to
restore ecological conditions in the Baltic Sea, Gren (2001) estimates the
marginal benefits of reduced eutrophication due to a reduction in nitrogen
loads to be in the range of 1 to 19 h/KG
N
.Fishman et al. (2009) estimate
treatment costs of drinking water in the coastal aquifer of Israel to be
in the range of 0.6 to 0.95 h/Kg
N
, depending on the amount of water
pumped for irrigation purposes (1,400–2,300 m
3
/year). In a greenhouse
experiment with maize as experimental plants, Rodriguez et al. (2008)
find that Nitrogen fertilization in the form of urea and UAN at rates of
100 and 200 Kg
N
/ha significantly increase a Typic Argiudol soil pH from
5.9 to 6.2. In addition, Nitrogen fertilizer production is highly energy
intensive and relies almost exclusively on nonrenewable energy sources,
such as natural gas.
There are several ways to define nitrogen use efficiency (NUE); here we
follow Moose and Below (2008) and consider agronomic NUE, that is the
ratio of crop yield to nitrogen fertilizer supplied. According to this
definition, an improvement in NUE arises from the following changes: an
increase in crop yield for the same amount of N fertilizer applied, a
decrease in N fertilizer applied for the same crop yield, or both. The
contribution of agricultural biotechnology to NUE improvements is
exclusively indirect, brought about through yield-improving traits such as
pest and herbicide resistance. For example, reduced damage to the root
system of GM maize resistant to Corn Rootworm can lead to greater N
uptake. Drought tolerant crops may also exhibit increased N uptake and
N utilization (Moose and Below, 2008).
Negative impacts on NUE are also possible. Zablotowicz and Reddy
(2007) investigate the impact of GR soybean on N fixation and
assimilation. Glyphosate is toxic to the soybean nitrogen-fixing symbiont,
Bradyrhizobium japonicum, and because adoption of GR soybean increases
glyphosate use, N fixation and assimilation maybe affected. As soybean is
typically assumed to obtain enough N through symbiotic N2 fixation, and
N fertilization is not part of traditional nutrient management practices for
this crop, it is particularly important to identify such effects. In a three-
year field study (2002–2004), Zablotowicz and Reddy found only slight
effects at label use rates, but a consistent reduction of N fixation and
The Environmental Benefits and Costs of GM Crops 183

assimilation at above-label use rates, meaning when glyphosate is used in
excessive amounts. Whether adoption of GR soybean induces excessive
use of glyphosate remains to be proven. Trigo and Cap (2003), for
example, found fertilizer use in Argentina – one of the world’s largest
adopters of GR soybean, with 16 million ha in 2007–2008 – still below risk
levels in 2003 and below use rates in other countries. In addition, the
authors note that GR soybean adoption has increased the agricultural area
under no-till practices exponentially, with a potential positive effect on
NUE (Rao and Dao, 1996).
Concerns have also arisen with respect to impacts of GM crops on soil
microbes, because these are involved in several processes influencing
nutrient cycling. No empirical evidence to back up these concerns
scientifically has been found yet for insect-resistant maize (Saxena and
Stotzky, 2001;Al-Deeb et al., 2003;Motavalli et al.,2004). Donegan et al.
(1995) find that insect-resistant cotton significantly stimulates growth of
culturable bacteria and fungi with accompanying changes in substrate
utilization. Evidence of alterations in community fatty acids, community-
level physiological profile, taxonomic diversity of the root-associated
community, diversity of Rhizobium leguminosarum and of variation in
Pseudomonas populations can be found for HR rapeseed (Siciliano et al.,
1998;Siciliano & Germida, 1999;Gyamfi et al., 2002). In GR soybean the
incidence of Fusarium (soilborne pathogen) on the root system was greater
within one week after the application of glyphosate as compared to the
conventional isoline (Kremer et al., 2000), though the effect of these
impacts on NUE has not yet been quantifiable.
3
In the light of the empirical evidence just shown for cotton, soybean and
rapeseed, it is not possible to conclude that yield gains due to genetic
modification directly result in NUE improvement. Several studies investigat-
ing effects of GMcrops at the farmor society levels consider the technologyto
be neutral in terms of fertilizer use (see, e.g., Qaim and Traxler, 2005).
3.4. Environmental safety issues of GM crops
The transfer of pest-resistant and HR traits to weedy species and the
persistence of feral crop plants carrying these traits raise issues about their
impacts on the agricultural environment. Environmental safety issues
focus on the direct or indirect effects of GM crops on nontarget organisms
and the transfer of GM traits to populations of wild plants (FAO, 2003).
Gene flow via pollen to a wild or cultivated plant generates the transfer
of GM traits from crops to wild relatives and non-GM crops. Seed
escaping during harvest, transportation or processing can also enable the
3
For a review of similar evidence for crops other than the once considered in this chapter, see
Mina et al. (2008).
Justus Wesseler et al.184

establishment of feral crop populations expressing the GM trait that can
even facilitate further gene flow between crop plants and wild relatives
(Dunwell and Ford, 2005).
The impact of a particular transgene in the wild is dependent on
several factors. If the GM trait confers a selective advantage over wild
plants, then persistence and introgression of this trait into wild or weedy
populations is more likely (Jenczewski et al., 2003). If the trait confers a
physiological disadvantage, then selection pressure is against the trait
and individuals containing the transgene will be competed out of the
population. For these reasons, different GM traits have the potential to
cause different environmental and agronomic impacts (Dunwell and
Ford, 2005).
Traits such as inherent resistance to insect, fungal and viral infection will
undoubtedly confer an advantage over plants lacking these traits. This
increased fitness may lead to an increase in transgene frequency in the wild,
which may have further downstream effects in terms of the dynamics of
insect populations and the organisms that predate upon them. The extent
of the benefit will depend upon the severity of the infection (Pilson and
Prendeville, 2004). Movement of herbicide-tolerance traits into wild
populations will only confer an advantage where herbicides are applied.
The physiological effort of sustaining the trait in the absence of herbicide
selection may by costly in the longer term (Snow et al., 1999;Gueritaine et al.,
2002), resulting in selection against these plants. Essentially, the processes
of genetic drift in the population will determine the fate of traits that
confer no benefit (Pilson and Prendeville, 2004).
The movement of GM traits conferring selective advantage into wild
plant populations has the potential to reduce the number or diversity of
wild plants and so alter the ecological structure of communities. Wild
relatives may in effect become extinct as a result of swamping by
competitive plants and repeated hybridization (Dunwell and Ford, 2005).
Specific traits such as drought and salt tolerance may allow plants carrying
these transgenes to invade new habitats and out-compete native plants,
leading to unwanted ecological change (Dunwell and Ford, 2005).
Van de Wiel et al. (2005) point out the high variations of results in
studies on gene flows, making it difficult to get a consistent view about
their implications for the environment. Regional aspects seem, however, to
be very important in quantifying the magnitude of gene flow (Scatasta,
2005). Gilligan et al. (2005) provide further evidence about the spatial
importance of planting GM crops. The theoretical framework they present
allows consideration of the spatial and temporal dynamics of gene
movement. By using the case of oilseed rape, they show that stochastic
models are far more important than deterministic models of gene
movement. The resulting probability distributions about local persistence
of novel genes provide important information for an environmental risk
assessment of GM crops. The model indicates the scope for reducing
The Environmental Benefits and Costs of GM Crops 185

environmental risk by introducing novel genes that are spatially explicit,
providing a challenge for plant breeders.
The effects of Bt crops on nontarget pests has been a continuous
concern among scientists. Wolfenbarger et al. (2008) conducted a meta-
analysis on the effects of Bt crops on functional guilds of nontarget
arthropods. They could not find uniform negative or positive effects when
comparing Bt crops with their non-GM counterparts, treated without any
additional insecticides. Some species-specific effects have been identified,
but when the non-GM counterpart has been controlled with insecticides,
Bt crops exhibit a higher abundance of nontarget arthropods.
The effect of Bt maize pollen on nontarget Lepidoptera in Europe has
been estimated to be extremely low. Perry et al (2010) calculated mortality
rates in the worst-case scenario of less than one individual per 1,572 (one
per 5,000 at the median) individuals for butterflies and less than one
individual per 392 (one per 4,366 at the median) individuals for moths.
This is hardly a relevant biodiversity effect, even when not considering the
effects of insecticide use otherwise. Similarly, Bartsch et al. (2010) conclude
that so far no negative environmental impact of Cry1Ab expressing Bt
maize has been reported. A
´lvarez-Alfageme et al. (2010) point out that
previous results showing a toxic effect of Cry1Ab and Cry3Bb on
ladybirds feeding on maize could not be replicated and were most likely
based on poor study design and procedures.
3.5. Tillage and GHG emission effects
The emission of GHG from agriculture has become an important issue
within the debate on GHG emission reduction. Agriculture has been
estimated to contribute to about 15% of annual global GHG emissions.
According to a UN (2008) report, however, GM crops can provide a
solution toward reducing these. One important contribution is via an
increase in reduced- or zero-tillage systems through the adoption of HR
crops (Ward et al., 2002;Frisvold et al., 2009).
The savings reported in the literature for diesel under reduced-tillage
systems are about 37 liters per hectare for the United States (Griffith and
Parsons, 1980). The standard conversion rate for a liter of diesel in kg of
CO
2
is about 2.63 (Defra, 2007), resulting in about 97 kg of CO
2
emission
reduction per hectare and year. Demont et al. (2004) calculate savings in
diesel use of about 1.43 liters per hectare for HR sugar beets in Europe as a
result of savings in pesticide applications. Koga et al. (2003) calculated
energy savings of reduced-tillage systems in Japan at about 47.51 ha
1
.
The differences here indicate that the main gain from fuel savings in HR
crops is a result of the adoption of reduced-tillage systems and not due to
fuel savings in pesticide application.
Justus Wesseler et al.186

In addition, fields planted with HR crops require less tillage between
crops to manage weeds and, as a result, no-tillage and conservation tillage
practices may reduce soil erosion (Fawcett and Towery, 2003;Nickson,
2005). Early studies have reported a reduction in soil erosion of up to 90%
for the United States (Baker and Johnson, 1979). Reduced tillage also
increases soil organic matter and improves soil structure and water-holding
capacity. Water losses can be reduced by up to 50% during dry years and the
flow of meteorological water be reduced by about 30% (Karlen and
Sharpley, 1994). Further, pesticide runoff can be reduced significantly
(Baker, 1990;Waibel and Fleischer, 1998). Improved water-holding
capacity reduces soil-nutrient losses, resulting in higher soil-nutrient content
(Blevins et al., 1983,Karlen, 1995) and improved above- and below-ground
water quality, caused by reduced nitrogen emissions (Wheatley et al., 1995).
A survey among HR canola-growing farmers in Canada (Smyth et al.,
2011a) confirms higher soil moisture content and less erosion problems.
Reduced tillage also has a positive effect on the biodiversity of soil
microorganisms and above-ground fauna biodiversity. Higher bird popula-
tions have been reported in areas with reduced tillage (Best, 1985;Castrale,
1985;Basore et al.,1986)aswellaspositiveeffectsonpopulationsofsmall
mammals (Basore et al.,1986) and benthic invertebrate communities (Barton
and Farmer, 1997). While reduced tillage provides important environmental
benefits, these might be reduced through the use of glyphosate or other broad-
spectrum herbicides in reduced-tillage systems. Nevertheless, the U.S.
Environmental Protection Agency considers glyphosate to have only a
minimal toxicity toward mammals, fish, and invertebrates (US EPA, 1996).
Studies by Phillips (2003),Beckie, et al. (2006), and Kleter et al. (2007)
found correlations between adoption of HR oilseed rape and adoption of
zero-tillage systems. According to Smyth et al. (2011a), the amount of
tillage operations among farmers growing HR canola in Canada dropped
by more than 70%: from on average 2.73 passes to 0.74 passes. The
authors calculate an annual value of carbon sequestration of about C$2.36
million from reduced and zero tillage in comparison to conventional tillage
and an amount of about 470,000t carbon sequestered.
The results of Smyth et al. (2011a) cannot directly be transferred to other
areas where farmers grow HR crops in combination with reduced- or zero-
tillage systems. While less soil disturbance reduces the decomposition of soil
organic matter and soil erosion, which often reduce carbon losses, this does
not always have to be the case (Smith et al.,2008). The timeline of soil carbon
sequestration also needs to be considered, as soil organic carbon (SOC) is
expected toreach a new equilibrium when moving from one tillage practice to
another and additional carbon sequestration ceases or decreases substan-
tially. According to Smith et al. (2008), the most appropriate approach would
be to measure changes in SOC through a change in land management
practices, though this would require a well documented land-use history that
is often not available. Nevertheless, the contribution of HR crops to the
The Environmental Benefits and Costs of GM Crops 187

adoption of reduced- and zero-tillage systems (Frisvold et al.,2009)cannotbe
ignored, nor can the indirect overall net environmental benefits of the change
in tillage systems induced by the adoption of HR crops.
4. Discussion and conclusions
Regarding the environmental benefits and costs side of GM crop
introduction, early concerns about severe negative implications on the
environment have not materialized. While some negative effects on
nontarget pests and plants have been observed, overall negative impacts on
biodiversity have not been confirmed. The effect of HR crops on the
biodiversity of nontarget flora has been negative. This is not surprising, as
the objective of the technology is to reduce nontarget flora within the field,
contributing to other environmental benefits such as more efficient use of
nutrients, increasing yields, as well as a higher quality of the harvested
product, reducing postharvest energy costs such as cleaning and drying.
These are aspects that policy instruments such as the European Food
Safety Authority (EFSA) recommendation for the cultivation of HR maize
NK603 do not consider (EFSA, 2009).
The positive effects of HR crops in combination with the adoption of
reduced- and zero-tillage systems and the productivity gains of GM crops
on biodiversity and habitat conservation have so far received little
attention in the literature. Similarly, the spillover effects on nontarget flora
control on following crops has only recently been addressed in Canada,
but has also been reported for Argentina, and warrants additional
investigation.
Studies assessing the changes in herbicide and insecticide use due to the
growing of GM crops show a decrease in EIQ. An increase in EIQ from
growing GM crops has not yet been reported. This is not surprising,
considering available GM traits that either control insect pests and
substitute insecticide use or are herbicide-resistant and substitute specific
herbicides with broad-spectrum herbicides that are more environmental
friendly. The long-term effects of an increase in the use of broad-spectrum
herbicides combined with an increase in the planting of HR crops
thus deserves further attention. The challenge is comparing a number
of chemical compounds in the environment which may all be below the
chemical compound-specific tolerance level with a single chemical
compound that even may have passed the chemical specific-tolerance
level, as in the case of glyphosate.
While the environmental benefits of insect-resistant crops have been
documented, resistance management has recently become more important.
The change in host plant preference of the cotton bollworm, as observed in
China, and the recently reported resistance of the pink bollworm to Bt
cotton in India (Sharma, 2010) challenge resistance management. On the
Justus Wesseler et al.188

one hand, this is important from an environmental point of view as a gain
for future environmental benefits of GM crops, on the other hand, the
suppression of the cotton bollworm in multiple crops may generate
additional external benefits that have not yet been investigated.
In summary, early concerns about the negative effects of GM crops on
the environment have proven to be almost negligible, while a number of
positive environmental effects have been observed, namely effects on
habitat conservation, biodiversity, spillover effects on following crops, and
pest suppression on multiple crops, though these have not yet been
assessed from an environmental economics point of view, with the
exception of HR canola in Canada.
The documentation of the positive environmental benefits of GM crops
disproves the hypothesis that the net environmental effects of GM crops
would be negative and supports the arguments of Graff et al. (2009),
Herring (2009),Paarlberg (2008), and Winston (2002) that environmental
concerns are instrumentalized in order to achieve other non-environmental
objectives. The empirical evidence regarding the environmental benefits of
GM crops calls for a change in research focus such that environmental
economists as well as policy makers pay more attention to the documented
environmental benefits rather than to the hypothetical environmental
costs. Policy makers also need to reconsider their policies toward GM
crops in light of these documented environmental net benefits and their
contribution to reducing the ecological footprint of agriculture.
Finally it should be mentioned that, while this chapter has focused on
secondary environmental effects of GM crops whose primary purpose is to
improve crop yields or crop production efficiency, GM crops exist whose
primary goal is to reduce environmental pollution. For example, Indian
mustard has been genetically engineered to reduce selenium pollution at
rates three to four times higher than wild relatives (Ban
˜uelos et al., 2005).
Genetically engineered Eastern Cottonwood has been designed and has
been shown to have a high potential for in situ Mercury remediation from
soils (Che et al., 2003). At the light of these and other important uses
society can make of this technology to reduce ever-increasing environ-
mental problems, policy makers need to start considering concerns from
the scientific community about potential positive environmental effects of
GM crops and GM plants that are not materializing because of regulatory
burdens.
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