The International Consortium on Agricultural Biotechnology Research (ICABR)

 

Non technical abstract

Evaluating Risks of Biotechnology:

 The Precautionary Principle and Social Standards

 

 Odin K. Knudsen and Pasquale L. Scandizzo 

 

Biotechnology offers tremendous potential benefits to society but also presents unknown risks.   While research focuses on how to manifest the benefits of this technology, the outside community fears the consequences that biotechnology may inadvertently have on the environment.  To balance these benefits against the environmental risks is one of the major public policy challenges of the 21st century.

One approach to this risk is through the application of the precautionary principle.  In the strongest form of this principle, technology should not be advanced until the risks are fully known and mitigated.  This “do-no-harm” approach places the burden of proof on the implementation of the technology.  A weaker version of the principle proposes that the risks need to be  accessed  and evaluated against the benefits before progressing on the technology.

 

While the stronger version of the precautionary principle has been vigorously supported by many environmental movements, critics argue that its application would stifle technological change.  Although the second principle has more support among policymakers, its critics argue that it does not go for enough -- even if the risks are small for an outcome, the consequences would be unacceptable if some threshold of impact is surpassed.

 

In this paper, we explore an approach that captures the essence of the weaker precautionary principle but also accounts for the “unacceptable” outcome.  This approach utilizes the concept of a social standard and a methodology applied in the assessment of basic needs and biotechnology and patents (Knudsen and Scandizzo).  Under this methodology , a social standard is established and accounted for in the cost-benefit analysis.  The existence of the social standard creates an additional cost or benefit to the assessment of a project.

 

In the paper, we develop the approach with uncertain outcomes and a society or politically established threshold or standard.  We show how the standard could be determined when there are costs to adaption or transaction costs in compensating those inputs by the project.  Finally, we present a dynamic model where the option value of a project is determined with or without a social standard or risk threshold. 


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