Cooperation mechanisms to improve water quality: an environmental exercise in the Mekong Delta
Aquaculture is one of the fastest growing industries in Vietnam (Joffre et al. 2019), both nationally and internationally. This specific industry in the VMD is not only currently dealing with climate change, which affects economic gains and pond productivity but also production itself has led to severe environmental impacts, including pollution and mangrove cover loss. One of the main sources of water for aquaculture ponds are water canals, where polluted water from the pond during a production cycle is exchanged by clean water coming from public sources such as rivers. Unfortunately, the wastewater from aquaculture is often discarded into the same water body serving as source water, leading to persistent and severe disease outbreaks and economic losses to the farmers. This is particularly risky for intensive farmers. Thus, adaptation strategies to climate change that simultaneously preserve biodiversity, reduce pollution and reduce the risk of losing farmers’ sources of income are needed. Our research project aims to disentangle the mechanisms for local farmer cooperation to eliminate water pollution from aquaculture-prevalent communities. More specifically we aim to understand whether farmers can collaborate to build canals to separate polluted from clean water, reducing the likelihood of disease outbreaks in ponds and increasing economic gains for farmers, as well as the sustainability of the ponds and the industry in the long-term. Within local cooperation, our objective is to bring information to policy-makers on formal, third-party mechanisms to increase farmer contributions with a view to improving environmental amenities and increasing the sustainability of food production in the long-term, while maintaining low costs of the policy. We will focus on two mechanisms that could be adapted to local communities: 1) third-party enforcement (application of a fine) and 2) third-party matching contributions. We will also analyse what happens when farmers have different incomes and want to contribute to the public good, by implementing situations with equal and unequal endowments. To analyse farmer cooperation, we implement a pen-and-paper, incentivized experiment (where payment of participants is based on their decisions). The experiment will be a ‘threshold public good game’ where farmers allocate part of their experimental income to a common project that will give them benefits if a specific level of contributions is reached by the group as a whole. This game has been used in the past to explain how communities can come together to build bridges, dikes to prevent flood damage or how farmers can invest collectively in a pump to avoid waterlogging. The experiment will be a 2 x 3 design, where the endowments of the participants vary, as well as the mode of enforcement (to reach the threshold of the public good). Our experiment is composed of six treatments. We are extending the line of research on cooperation for the case of the Global South, where local institutions usually drive initiatives to improve farmers’ profits and for the case of TPGGs. In addition, we explore the role of individual and social preferences in achieving farmers’ contributions towards the threshold public good.