Welfare impact of climate change on capture fisheries in Vietnam

Abstract

Fisheries are forecasted to shrink in the tropics due to climate change. In Vietnam, fisheries are a pro-poor economic sector and essential nutrition source; however, welfares of producers and consumers in the climate change context are not well understood. While most studies focus on the gains or losses of total products and revenues, this paper pays additional attention to the changes in surpluses of market players in the long run. A combination of the production function, demand and supply functions, and partial equilibrium analysis is employed to measure the production and welfare impacts based on time series data from 1976 to 2018 and a Vietnam household living standards survey in 2018. The results show that relative to the present, catch yield is likely to reduce 35%-45% by mid-century and 45%-80% by the end of the century. Consumers may lose their surplus of 7-9 billion USD (PPP, 2018) by 2035 and 10-18 billion USD by 2065 due to supply reduction, while producers may gain additional profit of 3.5-4.5 billion USD by 2035 and 5-9 billion USD by 2065 owing to a price increase. The research findings suggest that Vietnam could impose measures to limit capture effort, as set out in the Law of Fisheries 2017, without harming fisher welfare. The expansion of aquaculture could reduce the gap between supply and demand of wild fish to mitigate consumer welfare loss; however, this impact is still ambiguous.