Economic framework to assess the impact of banning pesticides, with application to sulfuryl fluoride for drywood termites (Blattodea: Kalotermitidae) in California.

Sulfuryl fluoride (SF) is a fumigant used to eliminate drywood termites (DWT: Kalotermitidae; Froggatt) and other structural pests. Because of its global warming potential, it has been suggested that SF be restricted as a greenhouse gas (GHG). We present an economic model to assess the net social cost of restricting SF. We consider 3 approaches to address DWT control- no treatment, allowing SF fumigation and localized treatments, and only local treatment. Each approach generates private and public benefits and costs. We estimate that the annual damage and home equity loss by DWT in California is US$4.5-16.8 billion without treatment. If fumigation is used on 20% of the houses and local treatments on the others, the combined social cost of treatment, damage, and GHG emissions are between US$1-US$2 billion annually. The annual cost of local treatments only would be between US$3.2 and US$4.9 billion. If the application of SF is severely restricted or banned, the social costs will increase between US$1.43 and US$4.31 billion annually. The implied cost per ton of CO2 eliminated is between US$624 and US$1,465, much above the price range of CO2 in other applications. The restriction/ban has significant equity and environmental effects, impacting low-income individuals living in rented properties and replacing damaged wood in housing will increase GHG emissions. We further recommend the continued use of SF until a comparable whole-structure alternative is developed that fits the parameters of our model.