3.1. The Incentive Influencing Factor of Buildings Energy Conservation Reconstruction Market Development
So far, there have been many studies on buildings energy conservation reconstruction at home and abroad. Although the national conditions are not the same, the central position of government incentive in buildings energy conservation reconstruction markets development has become a common consensus among researchers in this field. A detailed summary of previous research, we found that the research on incentive factors of the buildings energy conservation reconstruction mainly concentrated in market intrinsic characteristics, market operation mode, market development constraints, government incentive policies, and behavior choice of incentive objects. Sebi (2019) pointed out that government gains social and environmental benefits from energy conservation reconstruction and should play a leading role in market development. Soroye (2010) believed that externality result in failure of energy conservation reconstruction, and economic incentive is the most direct and effective means for the government to intervene in market economy to optimize resource allocation. Hamilton (2014) through that owners’ enthusiasm for energy conservation reconstruction is affected by externalities, and suggested that the degree of implementation of incentive policies is directly proportional to the owners’ enthusiasm. Wong (2017) pointed out that energy efficiency labeling system is an effective information disclosure measure that can effectively weaken information asymmetry and enhance market transparency. Fuerst (2015) pointed out that EPC stipulates energy saving behavior by signing a contract period. Droutsa (2016) found that the introduction of EPC mode into energy conservation reconstruction market can promote ESCO to share energy conservation benefits with owners, and coordinate the interest conflict of the industry chain subject. Krarti (2015) believed that institutional factors such as energy prices and market structure are obstacles facing the energy efficiency service market in all countries. Bjorneboe (2018) found that the main obstacles in energy conservation service market are the owners’ lack of energy saving awareness and the imperfect of market supervision system. Arumagi (2014) demonstrated that the energy conservation technology should be adapted to local conditions. Gram (2012) believed that the linkage between energy saving market and strategic emerging industries such as the Internet, new energy is insufficient, and no effective external interaction and support development model has been formed. Chowdhury (2014) found that green buildings constrained by the government's economic incentive policy, the supervision of the construction industry and the technical ability. Carlssonkanyama (2010) believed that information transfer, economic incentives, management tools and technical support are the key to promote the market development. Friege (2014) believed that countries should formulate individualized economic incentives including information and taxation to adapt to their own markets according to their own development characteristics. Painuly (2003) pointed out that financing barrier is one of the difficulties in ESCO development. Government should encourage financial institutions to establish specialized financing platforms and provide specialized financing products. Blengini (2010) emphasized the multiple combinations of incentives such as economic incentive, cultural incentive, and institutional incentive. Risholt (2013) pointed out that the key to building energy conservation is to improve the owner's awareness of energy conservation, and pointed out that knowledge, motivation and control are the main factors that can encourage owners to adopt energy conservation behavior. Capelo (2013) analyzed the impact of energy efficiency policies on ESCO in EU countries, through a Portuguese case study. Toleikyte (2018) applied different energy conservation potential cost curves to select the lowest cost energy efficiency solutions based on the perspective of investors and overall economy. Liu (2018) determined that the reasonable setting of incentive process is the key factor of incentive for market development through SWOT analysis. Paiho (2015) proposed a programmatic economic model to assess the effectiveness of government economic incentives. Pombo (2016) adopted a multi-criteria evaluation method and found that government incentives should focus on the coordination between energy conservation and environmental, economic and social benefits. Vine’s survey revealed the positive correlation between the information interaction between ESCO and government organizations (2015).
Using literature analysis, expert interviews, case studies and other technologies, combined with own experience and observation, this paper obtains the following 33 incentives factors of the buildings energy conservation reconstruction market development: ESCO service level (Painuly et al.2003), ESCO economic benefits(Wong et al.2017), market development maturity(Droutsa et al.2016), the cooperate willingness of market subject(Arumagi et al.2014), a sound market mechanism(Friege et al.2014), the energy conservation willingness of market subject (Arumagi et al.2014), incentives efficiency(Droutsa et al.2016), reconstruction demand(Bjorneboe et al.2018), incentive goal divergence, organization internal management efficiency(Paiho et al.2015),consistency of incentive goal(Pombo et al.2016), inter-organizational information interaction(Blengini et al.2010), improvement of incentive system(Carlssonkanyama et al.2010), incentive economic benefit(Bjorneboe et al.2018), appropriateness of incentive intensity(Carlssonkanyama et al.2010), effectiveness of incentives(Liu et al.2018), inspire all links (Krarti et al.2015), implementing effect of incentive means(Chowdhur et al.2014), incentive cost (Krarti et al.2015), incentive effect feedback(Wong et al.2017), the implementation effect of incentive means(Painuly et al.2003), the choice of incentive policy combination[(Krarti et al.2015), the matching degree of policy and market subject demand(Friege et al.2014), the identification of market subject demand(Arumagi et al.2014), incentive policy updates(Friege et al.2014), the difference of market subject demand(Risholt.2013), incentive utility(Liu et al.2018), market development prospects, energy conservation product innovation(Tuominen et al.2012), the change of organizational environment(Painuly et al.2003), market information interaction, coordination of industry chain, system innovation capability(Painuly et al.2003).
3.2. The Incentive System Structure of Buildings Energy Conservation Reconstruction Market Development
Based on systematic view, the incentive system of buildings energy conservation reconstruction market development has dissipative structure. Each subsystem coordinates mutually, forms a stable and orderly structure spontaneously, and has a strong logical relationship. Considering the law of market development, the complex incentive system of buildings energy conservation reconstruction market is divided into incentive element subsystem, incentive operation subsystem, incentive efficiency subsystem, and incentive environment subsystem. Each subsystem has different characteristics to maintain the balance and stability of entire system. The four subsystems of incentive elements, incentive operation, incentive environment and incentive performance cross-impact and mutually restrict each other to form a feedback system. Figure 3 shows the structural framework and relationships of the four subsystems in incentive system.
3.2.1. The Structure of Incentive Elements Subsystem
The incentive elements subsystem is the core of incentive system of the buildings energy conservation reconstruction market development. It contains incentive subjects, incentive objects, and incentive tools. It is a self-organized complex system. The structure of incentive elements subsystem is shown in Figure 4.
3.2.2. The Structure of Incentive Operation Subsystem
The incentive operating subsystem is the foundation of incentive system and the necessary condition of incentive elements subsystem. By controlling and coordinating the various operational links of the incentive system, the government maximizes the role of the incentive elements subsystem and ultimately realizes sustainable development of the building energy conservation reconstruction market. The structure of the incentive operating subsystem is shown in Figure 5.
3.2.3. The Structure of Incentive Efficiency Subsystem
The incentive efficiency subsystem reflects the operation efficiency of incentive system for the buildings energy conservation reconstruction market development, and is an important subsystem to measure the incentives effectiveness. The structure of incentive efficiency subsystem is shown in Figure 6.
3.2.4. The Structure of Incentive Environment Subsystem
The incentive environment subsystem is closely related to the other three subsystems, which not only provides linkage support for the implementation of incentive paths, but also provides ideas for collaborative development and innovative collaboration with other related industries. The structure of the incentive environment subsystem is shown in Figure 7.
3.3. Building Total System Causal Diagram
Based on obtaining the influencing factors, namely the system variables, the causal relationship between variables is extracted from interviews with authoritative experts, and the causal chain is supported by a paragraph in interviews. In addition, according to their own experience and observations, the historical data and other information sources, add additional causal chains not mentioned in interviews or other sources, in order to build a better system dynamics model. Start with any variable and explore all variables within the system that are causally related to the variable until all variables’ causal effect is completed, as shown in Figure 8.
We can clearly see that the total system involves many variables. It’s hard to directly analyze dynamic feedback relationship of all variables. Therefore, it is necessary to carry out dynamic feedback analysis for four subsystems separately (Serrano et al.2019). According to the structure analysis and interrelationship of incentive system for the buildings energy conservation reconstruction, we can get that the four subsystems of incentive elements, incentive operation, incentive environment and incentive performance promote and restrict each other to form a multi-feedback incentive system of market development(Almeida et al.2018). It is helpful for the research and demonstration of the total system to analyze the dynamic feedback relationship of the four subsystems' influencing factors separately.
3.4. Results Analysis of System Dynamic Feedback
3.4.1. The Incentive Elements Subsystem
The feedback relationship of incentive elements subsystem reflects interaction of incentive elements in the building energy conservation reconstruction market development. The synergistic interaction among incentive elements is the key to achieve incentive effect. The relationships among influencing factors of the incentive elements subsystem are shown in Figure 9.
As can be seen from Figure 9, the two main feedback loops of the incentive elements subsystem are as follows:
1) Incentive goal consistency→(+)Organization internal management efficiency→(-) incentive subject goal divergence→(-)Incentive implementation efficiency→(+)Incentive effectiveness→(+)Appropriateness of incentive intensity→(-)Incentive cost→(-) Incentive economic benefits →(+) Incentive system perfection→(+)Incentive goal consistency.
This loop has positive polarity. This shows that goal consistency can affect project incentive effect. Therefore, in the design stage of incentive path, government should focus on formulating unified incentive goals, improving the management efficiency within organization, reducing goal divergence of incentive subjects, improving efficiency of incentive implementation, and reducing incentive costs, so as to further improve the incentive system and enhance the consistency of incentive goal.
2) Incentive goal consistency→(+) Inter-organizational information interaction→(+) Incentive implementation efficiency→(+)Incentive effectiveness→(+) Market subject energy-saving awareness →(+)Renovation demand→(+)ESCO economic benefits→(+) ESCO service level→(+) Sound market mechanism→(+)The cooperate willingness of market subject→(+) Market development maturity→ (+)Incentive goal consistency.
This loop has negative polarity, from which it can be concluded that inter-organizational information interaction is essential to improve efficiency of incentive implementation. It can help to enhance the cooperate willingness of market subject, thereby improving the incentive system, promoting market development.
From the above two feedback loops, we found that organization internal management efficiency and inter-organizational information interaction are the key factors to improve the incentive goal consistency. Through continuous interacting with other factors, the implementation effect of incentives will be affected, the market mechanism will be improved, and subjects’ enthusiasm and willingness to cooperate will be enhanced.
3.4.2. The Incentive Operation Subsystem
The incentive operation subsystem mainly improves effectiveness of incentive implementation by strengthening the linkage of incentive links. The causal feedback relationships among the influencing factors in the incentive operation subsystem are shown in Figure 10.
As can be seen from the analysis in Figure 10, the three main feedback loops of the incentive operation subsystem are as follows:
1) Inspire all links→(+)Inter-organizations information interaction→(+) Incentive implementation efficiency →(-) Incentive costs→(-) Incentive economic benefits→(+) Improve incentive system→(+) Incentive policy update →(+ )Inspire all links.
This loop has positive polarity, which promotes information interaction among organizations by enhancing the inspire of each link, improving the efficiency of incentive implementation, reducing incentive cost, improving incentive income, thereby accelerating policy update, and enhancing their enthusiasm of energy conservation reconstruction.
2) Inspire all links→(+)Market subject demand identification→(+)Policy and market subject demand matching→(+)Selection of incentive policy mix→(+)Implementing effect of incentive means →(+)Willingness of market subject to cooperate →(+)Market development maturity→(+)Market subject demand difference →(+) Incentive policy update→(+)Inspire all links.
This loop has positive polarity, which proves that linkages in the implementation are important. By improving the accuracy of market demand identification, strengthening the matching of policy and market demand, improving the effect of incentive implementation, and promoting market development. With the market’s gradual maturity, the demand differences among market subjects become more and more apparent, and policies are constantly updated. In order to meet the changing needs of market subject, it is necessary to promote the linkage of all links of incentive.
3) Inspire all links→(+)Market subject demand identification→(+)Policy and market demand matching→(+)Selection of incentive policy mix→(+)Implementation effect of incentive means → (+)Feedback of incentive effect →(+) Improve incentive system→(+) Incentive policy update→(+) Inspire all links.
This loop is a positive feedback loop. Its significance is to improve the incentive system by enhancing incentive effect, improving incentives effectiveness, optimizing incentive system, and improving incentives linkage.
From the above three positive feedback loops, the key factors to improve the effect of incentive implementation are the linkage of each links, the matching of policy and market demand, and the feedback of incentive effect.
3.4.3. The Incentive Efficiency Subsystem
Government pays attention to the balance of incentive costs and benefits while promoting social progress and social welfare. Therefore, government incentive also has bounded rationality. The causality of influencing factors of the incentive efficiency subsystems is shown in Figure 11.
As can be seen from Figure 11, the three main feedback loops of the incentive efficiency subsystem are as follows:
1) Improve incentive system→(+)Incentive implementation efficiency→(+)Incentive means Implementation effect→(+)Reconstruction demand→(+)ESCO economic benefits→(+)Energy saving product innovation→(+)Market development prospects→(+)Incentive economic benefit →(+)Improve incentive system.
2) Improve incentive system→(+)Incentive implementation efficiency→(+)Incentive means implementation effect→(+)Renovation demand→(+)ESCO economic benefits→(+)ESCO service level→(+)The cooperate willingness of market subject→(+)Incentive utility→(+)Incentive economic benefits→(+)Improve incentive system.
3)Improve incentive system→(+)Policy and market demand matching→(+)Appropriateness of incentive intensity →(+)Market main subject’s energy-saving consciousness→(+)The cooperate willingness of market subject →(+)Incentive utility→(+)Incentive economic benefits→(+)Improve incentive system.
The above three loops are positive feedback loops, which mainly reflects that perfect incentive system can not only promote energy conservation products and technological innovation, promote market development, but also improve the ESCO economic benefits effectively, and achieve incentive effects better.
3.4.4. The Incentive Environment Subsystem
The incentive environment subsystems of the buildings energy conservation reconstruction market development mainly focus on market characteristics and dynamic changes in the environment at different stages of market development impact on each incentive subsystem. The causal feedback relationships between the various factors in the incentive environment subsystem are shown in Figure 12.
In Figure 12, the four main feedback loops of the incentive environment subsystem are as follows:
1)Market development maturity→(+)Incentive system perfection→(+)Economic externalities→ (+)Market subject energy saving awareness→(+)The cooperate willingness of market subject→(+) Market development prospects →(+)Market development maturity.
2) Market development maturity→(+)Market information interaction→(-)Information asymmetry→(-)The cooperate willingness of market subject→(+) Market development prospects →(+)Market development maturity.
3) Market development maturity→(+)Market information interaction→(+)Coordination of industry chain→(+) System innovation capability→(+) Energy saving product innovation→(+)The cooperate willingness of market subject→(+)Market development prospects→(+)Market development maturity.
4) Improve incentive system→(-)Organizational environment change→(-)Incentive goal consistency →(+)Internal management efficiency of organization→(-)Incentive subject goal divergence →(-)Incentive effectiveness →(+)Incentive economic benefit→(+)Improve incentive system.
The above four loops are all positive feedback loops, which mainly reflect that with market development, the incentive system is more perfect, and can effectively reduce the impact of environmental factors such as economic externalities, information asymmetry, change of organizational environment and so on. At the same time, environmental factors such as market information interaction and the coordination degree of industry subjects can also promote improvement of incentive system and market maturity.
3.5. The Characteristics of Incentives System
Through the above analysis, the characteristics of incentive system of the buildings energy conservation reconstruction market development are as follows:
1) Effective coordination among subsystems is the key to orderly operation of incentive system. The four subsystems of incentive elements, incentive operation, incentive efficiency, and incentive environment promote and influence each other. The promotion of incentive efficiency subsystem is based on the coordination of other three subsystems. The interaction among subsystems promotes the overall coordination, feedback control, and gradual improve of the incentive system.
2) Any change in one variable in the system will cause the change of other variables. Systematic theory emphasizes the relationship among multiple variables, and incentive factors that affect the buildings energy conservation reconstruction market development are not isolated. For example, strengthening the linkage of incentive links can affect and promote the information interaction between organizations, thereby affecting the efficiency of incentive implementation, improving the economic efficiency of incentive, and improving the incentive system, thus affecting effect of the buildings energy saving reconstruction market operation. Therefore, we should consider the dynamic changes of the whole system when design incentive path of energy conservation reconstruction market. In this process, the incentive mechanism should be continuously optimized to accelerate market development.
3) The incentive system circulation channel is information interaction, which realizes the identification of market demand and the feedback of incentive effect. The identification of market subjects’ demand, the feedback of incentive effects, market information, and information interaction between organizations are the driving forces for circular feedback of entire incentive system. Information interaction can also effectively attenuate the information asymmetry of the market, and eliminate the cooperation doubts of market participants, and promote mutual trust and win-win cooperation between market subjects.
4) The operation of incentive system needs pay attention to the dynamics of market development stage. Buildings energy conservation reconstruction market is not fixed, and the factors changes of incentive system generally conform to the track of market evolution. We should pay attention to subject demand and behavior evolution law at different stages , consider the influence of incentive policy update, attach importance to the matching degree between policy and market demand, pay attention to the market environment and industry development trend in different stages, and adjust and optimize the incentive mechanism in time.