New publication in Environmental and Resource Economics
The growth in global aquaculture production may address the lack of sustainability in wild fisheries, alleviate poverty in rural and coastal areas, and help meet the worldwide increase in demand for animal protein. However, there is an ongoing debate about the severity of the environmental impact of aquaculture production. Investing in new high-tech production systems can address both productivity growth and the environmental externalities, but high investment costs hinder adoption of high-tech production methods. We investigate the potential of a payment for environmental services program easing access to capital for producers to increase willingness-to-invest in more sustainable aquaculture practices in Vietnam. We conducted two discrete choice experiments to explore the supply and demand side of the policy. First, we elicited the public’s willingness-to-pay to reduce the environmental impact of conventional shrimp aquaculture, and second, we elicited farmers willingness-to-accept a credit subsidy to invest in high-tech production methods. Our results show that the public care about reduced environmental impacts, while farmers strongly prefer increased productivity. Furthermore, the public’s willingness-to-pay for reduced environmental impacts exceeds producer’s willingness-to-accept a subsidy to invest under most scenarios. This implies a potential for more sustainable aquaculture production in Vietnam.