Aquaculture Farmers' Economic Risks Due to Climate Change: Evidence from Vietnam

Abstract

Climate change poses a serious threat for aquacultural productivity. Employing the Autoregressive Distributed Lag (ARDL) model, this research aims to evaluate the economic impact of climate change on aquaculture in Vietnam, drawing on time series data from 1981 to 2013 and including aquaculture yield, acreage, investment, labor, temperature, rainfall, and damage costs to aquaculture caused by natural disasters. The results show that aquaculture yield depends not only on the current value of inputs, but also on their lag values and the yield itself. The results also show that rainfall, storm surges and tropical cyclones negatively affect aquaculture production. After any natural disaster, it takes at least two years to recover from the repercussions for productivity and return to the previous norm. To reduce the vulnerability of aquacultural communities, this study suggests that the state could establish a climate resilience fund specifically for small and medium-scale aquaculture farmers, providing special financial support for those affected by natural disasters.