We examine the characteristics and limitations of the existing system of tort liability
for addressing potential environmental damages from GM crops and consider whether
environmental bonding could be used to address these risks. We find that in the case of
GM crops, a bonding mechanism would complement some of the strengths of tort liability.
Specifically, the bonding mechanism provides some protection against bankruptcy, and also
shifts the burden of risk toward life science companies that develop the technology.
These factors could encourage additional early research by life science firms. However,
a bonding mechanism adds to the regulatory apparatus, and would likely increase
administrative costs, over tort liability, for public and private parties. Nevertheless,
an attractive possibility is that the cumulative outcomes of bonding, e.g., shifting
the risk burden, providing a measure of bankruptcy protection, and introducing an
additional regulatory component, would mitigate some of the political and social
objections to the environmental release of GM crops.