GMO approvals under pressure: How climate shocks shape policy across nations

PLOS One | https://doi.org/10.1371/journal.pone.0332298 October 22, 2025 5 / 20 To close the model, we substitute Equations (6–8) into Equation (9), allowing us to derive an explicit condition for mar- ket clearance in terms of productivity, factor endowments, and trade expenditure shares in the two-country setup. There- fore, Equation (9) can be rewritten as ns i As i ns j As j (γi)1–η (θi )(1–α)(1–η) ( θi 1 + θi )α + (θj )(1–α)(1–η) ( θj 1 + θj )α = τi [ α ( 1 + θi θi )–α ns i As i ns j As j (γi)1–η (θi )(1–α)(1–η) + (1 – α) ( θi 1 + θi )α n s i As i n s j As j (γi)1–η ( 1 θi )α(1–η)] + τj [ α ( 1 + θj θj )–α (θj )(1–α)(1–η) + (1 – α) ( θj 1 + θj )α ( 1 θj )α(1–η)] (10) In simple terms, our model operates in three steps. First, utility maximization on the consumer side yields optimal demand for GMO and non-GMO commodities. Second, on the production side, the producer’s profit function—subject to climate shocks—determines the optimal return to capital and labor wages. Finally, under market clearance, where total con- sumption equals the total income from capital returns and labor wages, the equilibrium can be expressed using countries’ comparative advantages in GMO and non-GMO commodities. This structure allows us to identify how climate shocks influence producers’ capital allocation decisions toward GMO technologies through changes in comparative advantage. Fig 1 presents a diagrammatic representation of this structural model. 2.4. Theoretical mechanism and proposition This section examines how climate shocks (ωi) affect country i ’s comparative advantage in GMO ( 1

γi ) and how this shift influences capital allocation to the GMO sector. Proposition 1 Holding other countries’ productivity constant, if climate shocks reduce country’s comparative advantage in GMO goods, then country has less incentive to allocate capital to the GMO sector. Proof of Proposition 1 Taking the derivative of 1 γi with respect to the climate shock ωi, we get: ∂ 1 γi(ωi) ∂ωi = ∂   ns i (ωi)As i n–s i (ωi)A–s i ns j As j n–s j A–s j   ∂ωi = 1 n s j A s j n–s j A–s j ∂ (n s i (ωi) As i ) ∂ωi ∂ ((n–s i (ωi) A–s i )–1) ∂ωi = –Hi ∂ (n–s i (ωi) A–s i ) ∂ωi ∂ (n s i (ωi) As i ) ∂ωi < 0 (11) where Hi = (n–s i (ωi) A–s i )–2 1 ns j As j n–s j A–s j . This derivative in Equation (11) is negative, indicating that climate shocks reduce country’s comparative advantage in GMO goods. Fig 1. A diagrammatic representation of the structural model. https://doi.org/10.1371/journal.pone.0332298.g001