Crop biotechnology has been one of the most prominent technological advances in agriculture in recent decades. The first generation of biotech crops since the mid-1990s has protected plants from biotic stresses such as insects (insect-resistant crops) and weeds (herbicide-tolerant crops), while the newly emerged second-generation aims to protect crops from abiotic stress like drought, and improves quality, among other things. A central theme of this dissertation is the economic and environmental implications of crop biotechnology, whether direct or indirect through associated markets, as well as the role of policy in balancing the benefits and risks to effectively accommodate these innovations. The dissertation comprises three essays on three representative biotech crops in maize production in the United States: (the herbicide glyphosate complementary to) the glyphosate-tolerant (GT) crop, the rootworm-resistant Bt crop, and the drought-tolerant (DT) crop.The first essay investigates the economic and environmental consequences of legislation restricting the use of glyphosate, the most commonly used herbicide in U.S. corn production because of its complementarity with glyphosate-tolerant crops. A monetary framework comprising economic, human health, and environmental welfare analysis is developed to examine the welfare consequence of a hypothetical glyphosate tax, given the currently available alternative herbicides. The results suggest substantial economic loss with only minor gains in human health and environmental welfare.The second essay evaluates the regulatory needs for balancing short-term rootworm control benefits with long-term costs of lost pest susceptibility in rootworm-Bt corn planting. Changes in Bt efficacy are related to historical Bt planting to determine the empirical long-term cost, which is then incorporated into a dynamic game of Bt planting to align it with current pest damage and risk of Bt efficacy erosion and propose counterfactual changes for sustainable use to benefit producers. Our findings indicate the necessity for region-specific regulation strategies, with the East significantly lowering rootworm Bt planting and the West adopting a more integrated management strategy.The third essay assesses the climate adaptation value of drought-tolerant corn in the con-text of crop insurance. Using a county-level panel dataset in the Corn Belt of the United States, we found that yield implications of DT crops differ by region: drought-related yield risks, measured using insurance claims data, are found to be lower with higher DT planting rates for Western Corn Belt but not the Eastern counties. Further quantile analysis and simulations for the rainfed Western Corn Belt counties suggest that insurance premiums need to be reduced to reflect the yield protection value of DT innovation and be actuarially fair.
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