Driving forces for low carbon technology innovation in the building industry: A critical review

Renewable and Sustainable Energy Reviews 74 (2017) 299–315

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Renewable and Sustainable Energy Reviews journal homepage: www.elsevier.com/locate/rser

Driving forces for low carbon technology innovation in the building industry: A critical review

MARK

⁎

Xiaodong Laia,b, Jixian Liua, Qian Shic, , Georgi Georgievd, Guangdong Wub a

School of Economics and Management, South China Normal University, Guangzhou 510631, China School of Tourism and Urban Management, Jiangxi University of Finance and Economics, No.169 Shuangguan East Road, Economic and Technological Development Zone, Nanchang 330013, China c School of Economics and Management, Tongji University, 1239 Siping Road, Shanghai 200092, China d Fraunhofer Institute for Building Physics IBP, Holzkirchen Branch Fraunhoferstr. 10, 83626 Valley, Germany b

A R T I C L E I N F O

A BS T RAC T

Keywords: System dynamics Low carbon technology innovation Driving force Construction industry

As a response to climate change, low carbon development has attracted a growing public attention. It is urgent to implement low carbon economy through technological innovation so that carbon emissions can be reduced effectively. The synergy and cooperation amongst the participants is required due to various challenges such as: multi-participants, multi-objectives and multi-technologies. These present significant challenges to the low carbon technology (LCT) innovation development. The objective of this study is to identify the relevant driving forces of LCT innovation and their interaction in the construction industry. This paper firstly analyzes the interrelationships of the participants via a methodology of system dynamics (SD) and questionnaire survey. The main driving forces and related influential factors are highlighted by means of a deductive method. Moreover, a SD model is established to examine the driving forces where government and private firms all play a role. The results show that LCT integration driving forces are significantly influenced by the continuous changes of a particular low carbon project as well as the number of participating enterprises. All the driving forces reflect an increasingly level of effectiveness. According to the model simulation, it will take a long period of time to transform traditional projects to low carbon projects. China needs at least 21 years that the quantity of low carbon buildings exceeds that of traditional ones. As a result, the building and construction industry is facing a significant challenge in terms of carbon emissions reduction. The numbers of enterprises participating in LCT innovation will not always increase with the enhancement of driving forces. Rather, it will keep at a stable level after a certain growth. A particular one single driving force has limited impact on the growth of low carbon projects and participating enterprises. System integration plays a crucial role to achieve the low carbon development.

1. Introduction Conventional projects are featured with excessive energy consumption and low-added value [1]. Currently, the construction industry is responsible for about 1/3 of the total energy consumption in China. This proportion is even increasing due to the rapid urbanization [2]. The low-carbon development has attracted a growing level of attention as a response to the global warming, the energy crisis and the constantly increasing energy consumption in China. Residential and commercial buildings accounted for approximately forty percent of the total energy consumption and carbon dioxide emissions in the United States [3]. China is now the largest emitter of CO2 in the world, having contributed to nearly half of the global increase in carbon emissions

between 1980 and 2010 [4]. Hong et al. employed a multi-regional input–output model to investigate the energy use embodied in the consumption and interregional trade of China's construction industry. Their study found that as a typical demand-driven sector, the construction industry consumed 793.74 million tons of coal equivalent in 2007, which is equal to 29.6% of China's total national energy consumption [5]. Last decades have witnessed growing public awareness of sustainable development in China arguably due to the social and environmental issues associated with the rapid urbanization [6], while the economic growth has been recognized as a decisive factor for PM2.5 emissions [7]. International policies indicate the building sector plays a critical role for sustainable development. According to the Intergovernmental

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Corresponding author. E-mail addresses: [email protected] (X. Lai), [email protected] (J. Liu), [email protected] (Q. Shi), [email protected] (G. Georgiev), [email protected] (G. Wu). http://dx.doi.org/10.1016/j.rser.2017.02.044 Received 23 December 2015; Received in revised form 22 January 2017; Accepted 7 February 2017 1364-0321/ © 2017 Elsevier Ltd. All rights reserved.

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process. Therefore, an appropriate understanding and identification of LCT integration innovation of the driving factors is needed. It plays a critical role in promoting LCT in the building industry. The existing studies on low carbon innovation can be classified as the following categories: methods or mechanisms for carbon emission analysis, driving forces for technological innovation, impacts of driving factors on carbon emission.

Panel on Climate Change (IPCC), the building sector has the greatest and cheapest potential for delivering significant greenhouse gas emission reduction [8]. As one of the industries with the highest energy consumption, construction has become a key area to promote low carbon emission projects. It has been recognized as a critical sector to define and realize a roadmap for the carbon emissions reduction at the national level. For instance, in UK, the tariff-based domestic Renewable Heat Incentive (RHI) is introduced to encourage the deployment of renewable heat technologies as a key component of its carbon reduction policy [9]. However, it presents a significant challenge to the transform the conventional building processes towards low carbon ones. The essence of the low carbon development lies in the systematic project management processes and technological innovation. The low carbon development depends on the optimization of energy demand/supply management technologies and carbon emission reduction at various levels of the building lifecycle. The low carbon transformation is subject to the effective implementation of LCT innovation. Due to various economic, social, and environmental challenges, the Chinese construction industry is under tremendous pressure to transit to a sustainability orientation [10]. Wang, Kuang and Huang [11] suggested that the main driving and impeding factor to energy-related carbon emissions is economic output and energy intensity respectively. Their study also showed that the contributions of energy mix, industrial structures, population size and living standards are not significant. Shao, Chen and Zhu examined innovative and sustainable residential construction methods for rural areas in western China, particularly the integration of solar energy technology with modern prefabricated building techniques. However, their study did not attempt to investigate the triggers on developing solar energy in Western of China [12]. Sustainability is one of the most contested ideologies because there is lack of consensus on what needs to be changed as a response [13]. As part of multi-level technologies integration, single technological adoption or innovation cannot satisfy the economic transformation requirement of the modern construction industries. CO2 emission is mainly derived from energy production for all sorts of industries, throughout the entire lifecycle. Therefore, the essence of carbon emission reduction in buildings lies in the rational management of energy production/ consumption during their construction, operation and reuse/recycling. Reduction of energy consumption and carbon emission will inevitably involve the improved systematic management and the technological system integration. The management of LCT innovation covers a series of carbon control technology management issues, e.g. the social, economic, technological and other aspects. Therefore, it calls for a timely study to critically review the studies related to critical factors for LCT innovation. This paper aims to identify the driving forces for LCT innovation and their impacts on the LCT innovation performance. Similarly, this paper examines how LCT management in the construction industry can support the low carbon transformation in China.

2.1. Methods or mechanisms for carbon emission analysis Integrated assessment models (IAMs) are increasingly used to evaluate impacts of carbon policy on energy structure, however results vary according to models [16]. A rigorous understanding of energy systems plays a crucial role in developing strategies to mitigate impacts associated with climate change. Agent-based modelling (ABM) is a powerful tool for representing the complexities of energy demand, such as social interactions and spatial constraints [17]. [18,19] employed a structural decomposition method to analyze the influencing factors and influencing mechanisms of carbon emissions [20,21]. discussed the technology application and policy simulation for carbon emission reduction and mitigation potentials. An extended STIRPAT model based on the classical IPAT identity was used to determine the main driving factors for energy related carbon emissions in Xinjiang [22]. Logarithmic Mean Divisia Index (LMDI) method is also a common approach to identify the driving factors for the sustainable development level and technology carbon emission [23,24]. [25] pointed out that the levels of priorities and awareness of sustainable practices vary according to stakeholders in the architecture, engineering and construction industry. This shapes the adoption of green technology, and the rate at which the industry is shifting towards more sustainable practices.

2.2. Driving forces for general technological innovation An and Zhang argued that the driving forces for enterprise's technological innovation are profit, achievement and social value [26]. Both Xiang and Duan argued that the driving factors of green technology innovation should be studied from the perspectives of regulation standard, government enforcement, economic interests, social requirement, technological progress and the improvement of working conditions, etc. [27,28]. Xiang pointed out that the main driving factors for enterprises to implement technological innovation can be classified into three aspects: the enterprise's internal demand, technological progress and external incentives [29]. Feng suggested that the enterprises' technological innovation is mainly driven by the internal and external environment forces. The internal driving forces mainly include: innovation goal, innovation consciousness, innovation ability and internal regulations. The external driving forces include: scientific and technological development, technology innovation policy, technology innovation system and other external factors [30]. Yang argued that the internal driving forces of enterprise's technological innovation are: the entrepreneurial spirit, entrepreneurial profits, internal incentive and corporate culture. Similarly, the external driving forces include: the science and technology progress, market demand, competition and governmental support [31]. From the circular economy perspective, Pang suggested that the enterprise's technological innovation is driven by the promotion of enterprise's technological progress and risk investment, the pull of the consumption demand, the pressure from the industry competition, and the relevant incentive policies [32].

2. Literature review The construction industry is facing various economic, social, and environmental challenges which facilitate a sustainability transition [14]. It is imperative to examine the driving factors and contributions of carbon emissions peak volume for reducing the cumulative carbon emissions in developing countries [15]. As reported in Section 1, LCT integration innovation involves various technologies and participants due to the complexity of a common engineering system. A number of obstacles or uncertainties exist during the implementation of LCT innovation. This determines driving factors amongst the enterprises participating in a particular LCT innovation integration project and/or

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Table 1 Driving factors to technological innovation and LCT innovation in enterprises. #

Innovation forces/driving factors

References

1

internal requirements, technical progress, external incentives

2 3

profits, achievements and social value external: laws & regulations, environmental pressures, customer or industry environmental requirements, public or environmental groups' opinion disclosure, suppliers’ environmental materials market demand, competition pressure; internal: enterprise innovation opportunities, emerging market demand, product quality requirements market demand, technology promotion and production demand license permission controlled by the government regulation, economic license motivated by the profit and the society, permission formed by the social repercussions Internal: innovation goal, innovation consciousness, innovation ability and internal regulation requirement. external: science & technology development, technology innovation policy, technology innovation regulation government’s regulations, breakthrough technology bottlenecks demand, public opinions pressures, customer demand and international market entry demand regulation standard, government enforcement, economic interest, social requirement, technological progress, working condition improvement internal: entrepreneurship, entrepreneurs profit, internal motivation, enterprise culture ; external: science & technology to promote, market demand, competition, government support Dealing with government regulation, obtaining economic profit and competitive advantage, maintaining corporate reputation and corporate citizen responsibility, voluntary environmental protection consciousness. the enterprise Innovation consciousness, profits or mission, enterprise social capital, market demand, the maturity of technology and the macro environment driving technological progress and promote risk investment, consumption demand pull and industry competition pressure, government incentive policies enterprise scientific research talents, scientific research budgets, innovation incentive measures, the protection of intellectual property rights and innovation culture

Xiang [29], Wang et al. [54], Li and Lin [55] An and Zhang [26] Hemel and Cramer [35]

4 5 6 7 8 9 10 11 12 13

Ye and Zhong [36] Wan [27] Feng [30] Peng [37] Yi [56] Xiang and Duan [28], Gan et al. [49] Yang [31] Hua [45] Yi et al. [46] Pang [32] Fu and Liu [48]

[43,44], Hua explored the low carbon driving forces for the manufacturing industry in China and concluded that the main driving forces of LCT innovation include: “dealing with government regulation, obtaining economic profit and competitive advantage, maintaining corporate reputation and corporate citizen responsibility and voluntary environmental protection consciousness” [45]. From the perspective of regional economy, Yi et al. pointed out that the main driving forces for the enterprise to implement LCT innovation include “enterprise innovation consciousness, profits or mission, enterprise social capital, market demand, maturity of technology and the macro environment driving forces” [46]. Liu et al. investigated the impact of various factors (e.g. population, urbanization level, economic development, energy intensity, industrial structure, energy consumption structure, energy price, and openness) on both the scale and intensity of carbon emissions [47]. Fu and Liu revealed that scientific research talents, scientific research budgets, innovation incentive measures, intellectual property rights and innovation culture of enterprises are also the critical factors of LCT innovation [48]. From the regional perspective, Gan et al. conducted an empirical study which identified the critical factors impeding the adoption of sustainable construction from the owners' point of view. Seven most critical factors are identified, namely, economic feasibility, awareness, support from project stakeholders, legislation and regulation, operability of sustainable construction, resource risk, and project management model [49].

2.3. Driving forces for low carbon technological innovation Vast majority of these studies focused on green technology, sustainable development, low carbon economy and ecological economy. Very few studies analyze the driving forces to LCT innovation in mainland China. In the early 1990s, Yang and Xu identified five driving forces of green technology innovation, namely: government regulations, breakthrough technology introduction bottlenecks, the pressure from the public opinions, customer demand and the need of Chinese technology entering into the international market [33,34]. Hemel and Cramer analyzed the driving forces to green innovation from the perspective of product design. They pointed out that ecological product design is subject to internal and external driving forces. One the one hand, external driving force includes six aspects, namely, the laws and/or regulations, the environmental protection pressure, the customer or industry requirements of environmental protection, the opinion disclosure of public or environmental groups, the suppliers’ environmental material requirements and the pressure from the competitors. On the other hand, the internal driving forces include innovation opportunity, product quality requirements and the response to emerging market demand, etc. [35]. The so called “green innovation”, pulled by the market demand, can be found among some empirical studies. One of those, originated in Western Europe, showed that enterprises mainly received feedback from users as the fundamental basis to determine the product innovation. New innovative ideas are 100% from the users of which 58% from the user regarding the major innovation ideas, and 30% from the enterprise production needs. A study conducted in UK shows that technology driven innovation only occupies 27% of the total innovation [36]. Peng suggested that firms were mainly motivated by license permission to perform green behavior and gain competitive advantage (controlled by government), while the economic license motivated with profit and society permission are formed by the social repercussions [37]. Based on the deterrence theory [38], incentive theory [39,40], system theory [41,42] and the theory of corporate social responsibility

2.4. Impacts of driving factors impacts on carbon emission Researches on the influencing factors of carbon emissions mainly concentrated on the energy consumption and economic growth [50,51], energy structure optimization and economic structure change [52,53], technological progress [54,55]. Yi analyzed the factors driving the growth and survival of green businesses in the United States. That study showed that the driving factors, with the exception of energy prices, significantly affect carbon emissions both directly and indirectly. The adoption of renewable energy policies, the permission of renewable energy credits imports, the stringency of minimum wage

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Market or customer demand 2%

legislations, and presence of clean energy business associations are the major driving forces for the green business development in the United States [56]. As shown in Table 1, there are a number of driving forces to the LCT innovation. The driving forces derived from both internal and external aspects of enterprise. However, previous studies mainly focused on themes of market, user demand, competition, policy, technology progress and corporate social responsibility etc. It is necessary to examine driving force to technological innovation in enterprises so that the corresponding measures can be developed. Existing studies have extensively explored the technological innovations of environmental sustainability within the Chinese construction industry. By contrast, very little attention has been paid to a holistic exploration of the economic and social dimensions related to sustainability, or to the sustainability strategies and behaviors of construction firms in China [9]. Compared to the existing studies, the contributions of this study to the existing body of knowledge are from the following two aspects. Firstly, the driving forces of low carbon technology innovation in the building industry are analyzed with more complex but systematical approach. Secondly, SD method is adopted in this study to simulate the innovation driving forces and their impacts on facilitating low carbon developments in the building industry. These empirical data based findings provide useful references to both policy makers and practitioners for evidence-based decision making on low carbon transformation.

Other 10%

Deal with gov. supervision 16%

Sel-Envir protection & SER 15%

Keep enterprise image 15%

Profit & competitive advantage driven 26% Gain gov subsidy 16%

Fig. 1. Driving forces to LCT innovation (Multi options, enterprise amount: N=159).

As shown in Fig. 1, "pursuit of economic benefits and competitive advantage" is one of most significant driving forces for LCT innovation in the building industry. This is in line with existing literature [37] related to the LCT innovation in manufacturing industries. According to the national strategy, it is a rational choice for construction enterprises to implement LCT innovation with a clear orientation to the sustainable development. Similarly, "dealing with governmental regulations" is another critical driving force of LCT innovation in the construction industry. Due to high energy consumption and carbon emission of the industry, the government regulation plays a critical role in the whole process. It is difficult for enterprises to implement LCT innovation under the fierce market competition. Other critical driving forces include: “government subsidies pursuit", "maintenance of corporate reputation" and "initiative environmental protection and social responsibility".

3. Identification of driving forces The critical literature review shows that there are multiple dimensions for the driving forces of LCT. The methods of literature review and SD were employed in this study to examine the influence of driving forces on the LCT innovation performance. In particular, the interaction of various driving forces is investigated.

3.2. Expert interviews and main participants’ survey The survey focused on analyzing the external driving factors of LCT innovation in construction enterprises. Considering the complexity of LCT innovation and the diversity of participants, some participating enterprises were interviewed such as design companies, construction companies, suppliers and research institutions. The majority of respondents are from the enterprises in the administrative area of Yangpu District Construction Administration of Shanghai, and the green certification consulting project management team from Green Energy Technology (China) Co., LTD. They are all well-known IPO construction enterprises such as: China State Construction Engineering (CSCE), China Railway Group (CRG), China Communications Construction (CCC), and some are among the top 500 enterprises in the world, while others are notable local enterprises such as Shanghai Construction Group (SCG), China Nerin Engineering Co., Ltd. (NERIN). For the survey respondents, 32% are contractors, 42% are supervision companies, 12.6% are construction companies, 7.5% are construction material suppliers, and the rest, 5.9%, are consulting company or research institutions. Most of the respondents have at least three years of working experience. Twenty-one percent of respondents are senior management. Five projects managers from industry and five researchers from Tongji University and Shanghai Jiaotong University were invited to review the indexes. Some extra driving forces were identified and shown in Table 2. Government agencies, as the main driving force on low carbon transformation under the context of global warming and energy crisis, promote the development of low carbon energy saving products. The Government and local administrations are responsible for the policy making of LCT innovation at the macro level and should assure the realization of national environmental goals. The driving forces are focused on low carbon economy transformation, strengthening the environmental protection and energy saving for the key engineering

3.1. Field survey Construction activities have significant impacts on the community and environment. As a result, green construction has been promoted to mitigate these issues [57]. It is well recognized that enterprises are the main participants in the low carbon technology innovation. Some representative enterprises were surveyed in order to verify critical driving forces identified in the literature review (see Table 1). The surveyed enterprises include: the developers, constructors, supervision company, design company and suppliers. With the assistance of Yang Pu Construction Administration1 in Shanghai of China, a total of 250 questionnaires were distributed and 159 valid questionnaires were received, with a response rate of 63.6%. Only one survey participant suggested a new driving force: "promote the development of low carbon technologies", which could be placed in the "corporate environmental and social responsibility initiative" category. This indicated that the driving forces listed in Table 1 can be used for further study. The mid-level managers in the enterprises accounts for 21% of survey respondents, the technical backbone of their particular companies occupies 24% of the respondents, the rest of 18% are managers. Therefore, it can be modestly classified this distribution as a certain representativeness. The distribution of driving forces is shown in Fig. 1. 1 Yangpu District Construction Management agency in Shanghai city is run by the Shanghai Municipal Government, which is legally in charge of standardization, metrology, quality and special equipment safety. The bureau is affiliated with the Shanghai Industry Manufacturing License Office, Shanghai Metrology and Calibration Administration Office and the Shanghai Famous Brand Recommendation Committee. It is also in charge the construction companies in Shanghai city, which is a most construction company representative area in China because of its economic position. The LCT used in the construction sector is categorized into four level, namely, low carbon design technology, low carbon energy technology, the structure of low carbon and low carbon material technology, etc.

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Table 2 Interview summary of LCT innovation drive forces. Participants

Driving forces factors

Developer

1. For multi-objective integrated implementation of construction including project benefits, social interest and carbon emission benefits; 2. Project engineering technology standard and schedule commitment. 1. Create more benefits for enterprises; 2. Survive and sustain growth in fierce market competition; 3. Meet the projects’ environmental performance requirements for enterprises. 1. Solve the technical problems that may encounter in the process of design phase, and optimize engineering design to improve efficiency; 2. Technical reserves increase and technology innovation strength enhancement or competition ability for the design company. 1. Pursuit the economic benefits and improve enterprise's competitive advantage; 2. Minimize the gap between the low carbon expected performance level and the reality; 3. Fulfill the low carbon material or technical equipment requirements from design company or contractors. 1. Achieve the research mission of the theoretical research transformation into practice; 2. Cultivate the LCT talent person and technology reserve for the social sustainable development; 3. Strengthen enterprise independent R & D ability, enhance the industrialization and marketization of LCT.

Construction company

Design company

Material manufacturers

Universities and Research institutions

construction projects to achieve the ecological harmony between human and nature [58]. In summary, the main driving forces of LCT innovation are from social, economic, environmental, technical, legal and cultural perspectives. LCT innovation is not a "pure technical" activity. Rather, it is a comprehensive systemic approach and involves corresponding activities of government and enterprises.

Low carbon target realization +

+

Carbon deduction target: Social benifit environmental benifit

+ +

Government Drive

Supplier +

4. SD analysis of LCT innovation driving forces SD is an approach to understand the nonlinear behavior of complex systems over time using stocks and flows, internal feedback loops and time delays [59]. As shown in Section 3, the economic profit is the main driving force to LCT innovation, followed by customer requirements, regulatory and technology equipment upgrades, etc. These are basically accorded with the general law of market economy theory. The following assumptions are made for the SD model:

+ Contractor +

+

Low carbon technology integration innovation drive: Government demand, market demand, enterprise demand

+

Developer

+ University or research institution

+

Design company + Fig. 2. Concept model for driving forces to LCT innovation.

(1) Participants of LCT innovation are the enterprises, including design companies, developers, contractors, material and product manufacturers, supporting parties such as R & D institutions and the governmental institutions in the construction industry. (2) Enterprises are willing to take part in the LCT innovation with a direct purpose, i.e. sustaining a competitive advantage and economic profits in the market. (3) Enterprises participation in LCT innovation can bring certain economic profits but with a certain level of risks. Enterprises should have capacity to be a pioneer in the innovation activity but also bear risks. (4) Government can provide enterprises with a fair market environment, and carbon emissions reduction amount can be exchanged freely in the market. (5) The profit of enterprises to participate in LCT innovation is greater than importing the technologies. (6) The multiple participants and various complex technologies involved in LCT innovation activity lead some uncertainty factors into the construction project life cycle. During the cooperation process, effectiveness increase among the participants, and delay phenomena would inevitably occur. Therefore, the technological innovation efficiency is a lag phenomenon according to some certain loops in the system. (7) All construction projects are homogeneous products.

Therefore, the developers will request design companies to put forward low carbon building design according to the relevant regulations and project engineering requirements, then request the contractors to purchase low carbon construction materials, equipment and workmanship, in order to operate low carbon construction in accordance with the modern design requirements, etc. This will lead to a series of LCT innovation activities among the materials manufacturers and form a low carbon supply chain which motivates the industry's decarbonization. A conceptual model of LCT innovation driving forces is shown in Fig. 2.

+ Low carbon technology integration incentive Government R1 measurement investment Social image Market demand Economic benifit investment + + + Government Low carbon tech supervisor integration innovation driving forces -

+ Developer investment

Enterprise SER Design company investment +

It is worth noting that the level of efforts from participants in LCT innovation varies according to their role and interest. The government encourages construction enterprises to implement low carbon projects.

+ +

+

Low carbon tech integration innovation culture Fig. 3. Driving forces SD causal feedback loop of developer.

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X. Lai et al. Social accept low carbon project Low carbon tech+ integration innovation incentive measurement

Market demand

construction project low carbon design decision Competition demand

Tech progress + -

Profit driving Government supervisor

Government investment

+

+ Low carbon tech + integration innovation driving forces +

Enterprise SER + +

Construction phase is the most important, yet complex stage in the whole project life cycle. It consumes a large quantity of resources and emits a large amount of greenhouse gas emissions (GHG) [60]. Therefore, contractor's participating behavior plays a critical role in the process of LCT innovation management. Once the design company and developer make LCT innovation decision, they transfer the low carbon design scheme and related technical requirements to the construction enterprise for execution, by concerning design costs combined with enterprise's technological innovation ability and technology maturity. The contractor invests related cost according to the technical standards (e.g. using the corresponding low carbon construction technology, purchasing materials with a low carbon footprint) in order to fulfill the requirements for low carbon performance. It forms the third positive feedback loop among the developer, design company, contractor and government to lead LCT innovation activities moving forward (see Fig. 5). This feedback path contains two circuits, namely:

+

+ Design company -

Social and environmental benifit

R1

Social image

R2

4.3. Causal diagram of driving forces for contractor

Low carbon R&D personel Engineering quality requirement

Developer investment

Low carbon tech integration innovation culture

Fig. 4. Driving forces SD causal feedback loop for design company.

(1) Developer investment → technological innovation incentive measure → contractor investment → design company investment → developer investment. This loop reflects the causal feedback among the developers, contractors and design company on LCT innovation requirements and implementation standard. It should be noted that, due to asymmetric information in the low carbon implementation process, it is not unusual to form a kind of principal-agent relationship between government and enterprises causing a collusion behavior. (2) Design company investment → low carbon project decision making → low carbon building design → contractor investment→ design company investment. The feedback path indicates the causal relationship between the contractors and design company. In this process, another level of conspiracy exist between the design company and contractor. This is due to the fact that the technical maturity of design companies and the technical ability of construction companies are mostly unequal. This is especially the case after taking the design cost, construction standard, construction schedule, construction cost and environmental standard into consideration. Therefore, as the main participant in LCT project innovation, contractors should not only fulfill the design requirements, but also make sure the project schedule and prevent the collusion behavior. These are critical issues during the process of LCT innovation management (described as R3).

4.1. Causal diagram of LCT innovation driving forces for developer As a major participant in construction projects, the developer plays a key role in LCT innovation process. During this process, the local government releases certain technological innovation incentives to motivate the developer company to implement low carbon construction projects. Consequently, the developer requests the design company to have a low carbon design. In this way, it forms a positive feedback loop described as R1) between the government and developer to enhance low carbon technology innovation activities (see Fig. 3). This is the first feedback path in the management of low carbon technology innovation. The detailed feedback path is: government investment → technological innovation incentives measure → developer investment → government input. This feedback path reflects the causal relation between the driving forces and the investment from government with economic profit orientation as the dominant factor for the implementation of LCT innovation. 4.2. Causal diagram of driving forces for design company The design company is one of key participants for low carbon technological innovation in the construction industry. There are a number of factors that drive the designer to employ more technology talents to fulfill the carbon emission control requirements of construction projects. These include: project design requirements from developers, the design enterprises' own technology progress demand, market competition demand and government’s incentive measures. Thus, it forms another positive feedback loop among the design company, developer and government (described as R2) (see Fig. 4). This feedback path contains two circuits, namely:

4.4. Causal diagram of driving forces for material supplier Located at the upstream of supply chain, the main driving source for material suppliers is to pursue economic benefits and enhance the enterprise's competitive advantage during the LCT innovation process. On the one hand, construction enterprises request the particular supplier to provide low carbon materials and products according to the requirements consigned by the design company. The suppliers are encouraged to increase the investment on a more effective production and material R & D, in order to satisfy the demands of low carbon construction projects and obtain economic profits. On the other hand, the low carbon economic transition requirements, vendor internal technological progress and innovation willingness also form a positive impact on low carbon innovation from the building material manufacturers. The stronger innovation willingness enterprises have, the greater technology investment and intensity enterprises they will have. As a consequence, the manufacturer's innovation ability and technical maturity enhances correspondingly. The more obvious the innovation

(1) Governmental investment → technological innovation incentive measure → design company investment → developer investment → governmental investment. (2) Developer investment → technological innovation incentive measure → design company investment → developer investment. This conceptual model indicates how the developer and design company facilitate the implementation of LCT innovation moving forward into the next cycle (described as R3).

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Low carbon project QTY + Project low carbon target achievement +

Conspiring behavior2

+

Contractor investment +

Construciton - cost +

+ Low carbon tech integration innovation incentive measurement +

R1

Low carbon tech innovation capability

Low carbon building design - -

Social accepet low carbon project

+

+ Government investment +

Low carbon tech integration innovation driving

R3 R2

Low carbon tech integrationLow carbon maturity design cost +

Tech progress

+ +

Developer investment +

Low carbon R&D personel + Low carbon tech integration + Design company innovation culture investment + Conspiring Engineering quality behavior1 Market competion requirement demand

Construction project low carbon design decision +

Fig. 5. Driving forces SD causal feedback loop for contractor.

Low carbon project QTY

+

+

Low carbon tech innovation consciousness Low carbon tech innovation capability2

Project low carbon + target achievement +

Developer investment

+ Social accept low carbon project

+ + Supplier - Low carbon material tech maturity investment

R4

Industrialization of scientific research + achievements + R&D budget Low carbon tech integration innovation R&D ++ personel + Design company + investment Universities & research + institution investment

+

+

+ Contractor investment

+ Low carbon tech integration innovation incentive + measurement +

Low carbon building design + R2

R3 Construction project low carbon design + +

R1 Government investment

Low carbon tech integration innovation driving + + Low carbon tech integration R&D personel

R5

Government investment +

Fig. 7. Driving forces SD causal feedback loop for university & research institution.

Developer investment

universities and research institutions to explore scientific research innovation. It forms another causal loop combined with “production, study and research” among the universities, government, design company and enterprises (R5) as shown in Fig. 7. This feedback path contains two circuits, namely:

Design company investment

Fig. 6. Driving forces SD causal feedback loop for building material suppliers. Note: for simplification purpose, some driving variables were omitted from this diagram.

(1) Government investment → scientific budget → universities and research institution investment→ industrialization of scientific research achievements → government investment. This loop reflects that the governments industrialize scientific and technological achievements by means of incentive mechanism, and encourage a new round of investment to stimulate the LCT innovation activities. (2) Developer investment → design company investment → universities and research institution investment → industrialization of scientific research achievements → design company investment.

effectiveness, the faster for an enterprise it is to achieve carbon emissions control objectives in the low carbon building projects. It forms another positive causal loop between the supplier and the contractor, namely R4 as shown in Fig. 6. A feedback loop shown in Fig. 6 includes: contractor investment → technological innovation incentives measure → supplier investment→ low carbon performance realization → contractor investment. 4.5. Causal diagram of driving forces for universities & institutions

The path shows, that the cooperation causal feedback between universities & research institution and enterprises to promote the low carbon development among the construction industry from a perspective of scientific and technological innovation (described as R5).

Universities and institutions are responsible for the studies on LCT innovation and the industrialization of R & D technology achievements. At the same time, they cultivate scientific research talents and technological experts for enterprises. As a supportive participant, the government would regularly provide a certain budget to encourage the 305

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+ Market acceptance on low carbon project

Low carbon project number increase

+

+ Environmental benifit achievement

Low carbon tech innovation consciousness R6 Low carbon tech innovation capability + Low carbon material Supplier + tech maturity investment +

+ Project low carbon goal realization + + R4

+ Enterprise participating + number increase Social benefit achievement

+ + + R1 Contractor Government Low carbon tech integration + investment image increase innovation incentive Profit driving Construction measurement + + cost Government + Market Government supervision Low carbon demand investment + innovation capability + Low carbon Social image + Low carbon tech project design + Conspiring integration innovation behavior 2 - + driving forces Low carbon tech Low carbon tech Design integration innovation R2 Corporate SER maturity cost culture Low carbon tech + R3 ++ integration innovation R5 Tech progress R&D personel Cconstruction project Developer low carbon design + + + investment + + + Design company R&D budget Conspiring investment + behavior 1 Competition - + demand Universities and + Engineering quality + research institution requirement investment Fig. 8. SD model for LCT innovation driving forces: multiple participants.

Low carbon project lookup function

Low carbon project emmision amount



Project Demand

Carbon emmision amount CO2 emmision target TPUA Low carbon LC Project profit emission transition rate(LCPP) profit(LCTP)

Yearly New TPA Project demand traditional project choosing amount(TPCA)

Low carbon project choosing amount(LCPCA)

LCPSA lookup function

TTL TTL LCPA low carbon project finished PCPCfA amount(LCPCfA) LC tech integration innovation capability lookup function

Enterprise value(EV) LCPUV

CO2 Emission Unit price

TTL LCPSA

LCTIM lookup function(LCPSA)

LC tech integration maturity(LCTIM)

Market driving Enterprise SER

Enterprise LCIC

LCPS lookup function

LCPEPA

LC R&D personel lookup function

LCTI coefficient

Government incentive lookup function market competition driving lookup function

LCTII coefficient a LCTII

CO2 deduction ttl amount

Low carbon project failed amount(LCPF)

LCPSA

RDH lookup LCTI function

Government incentive amount(GIA)

TTL TPSA Traditional successful project amount(TPSA)

RDH LCTI vs LCIC Loopup function

govern incentive LC RD personel coefficient rate

LCTII lookup function(RDH) Increase of LC tech personel

LC RD personel QTY

LCPP lookup function

Enterprise SER lookup function

LC RD personel quit

LC RD personel quit rate

Fig. 9. SD simulation - simplified flow diagram - LCT innovation participants.

This causal loop diagram contains three big feedback paths, namely:

4.6. Driving forces causal model with multiple participants On the basis of above causal loop R1–R5, a multi-agent based integrated innovation driving forces causal loop R6 is developed (Fig. 8).

(1) Government investment → developer investment → design com-

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pany investment → contractor investment → supplier investment→ project low carbon goal realization → low carbon project number increase → market acceptance on low carbon project → enterprise participating number increase→ government investment. (2) Government investment → developer investment → design company investment → contractor investment → supplier investment → project low carbon goal realization → low carbon project number increase → market acceptance on low carbon project → social & environmental benefit increase → government image increase → government investment. The above two causal feedback paths are mainly based on LCT innovation management from the perspective of government. It reflects that low carbon incentive measures and improvement of the industry policy can bring two positive loops during the low carbon economy promotion process. These are: the growing number of low carbon projects and the growing number of enterprises in LCT integration innovation. (3) Developer investment → design company investment → contractor investment → supplier investment → project low carbon goal realization → low carbon project number increase → market acceptance on low carbon project → market demand increase → developer investment.

per year, RDQ technical personnel quit per year, I1: initial value. In reality, the enterprise's total output value includes the value of traditional project and low carbon projects, namely:

EV : enterprise total value, TPA: traditional project amount, LCPA: low carbon project amount, TPUV : traditional project unit value, LCPUV : low carbon project unit value. The investment budget related to LCT innovation is taking from the annual output value of enterprise; the technological innovation investment intensity coefficient is determined by the enterprise's management, based on the comprehensive influence of the driving forces, namely:

LCTII : low carbon innovation investment; PV : enterprise projects value, a is technological innovation investment coefficient. According to our survey and telephone interview, the percentage of enterprise’s technology innovation investment is within the range from 1.5% to 5% of the enterprise total revenue. The number of technological innovation related employees is about 5~20% of the total number in each of the investigated company. The coefficient is impacted by driving forces such as government subsidies, market competition, and voluntary corporate environmental protection and so on. The comprehensive investment intensity coefficient can be expressed as Eq. (5).

a=

∑ (β1 + β2 + ... β5)

(5)

LCTII : LCT investment intensity ∑ (β1 + β2 + β3 + ... ) means, overall synthetic effect of the driving forces β1, β2 , ...β5 represents influential coefficient of each driving force and is determined by decision makers. The value, used in this model, is gained from survey and expert interview.

the the the the

TPA = INTEG (TPCA − TPSA, I2 )

(6)

TPA: amount of traditional projects, TPCA: choosing amount of traditional projects, TPSA amount of successful traditional projects, I2 is the initial value in the model.

5. Driving forces simulation on LCT integration innovation

TPSA = Delayfixed (TPCA , LT , I3) 5.1. Model introduction

(7)

TPSA: amount of successful traditional projects, TPCA: traditional project choosing amount,LT : traditional project accomplishment lead time, initial value is I3.

Considering the data availability and computability, the developer is selected to simplify a LCT innovation driving forces model for the building industry. The equation can be used to describe the system logical relations and to clarify the quantitative and control relationships within the system variables. It can explore the dynamic rule and influence of driving forces on enterprise’s LCT innovation of construction projects (see Fig. 9). This model contains 50 variables, 6 level variables, 11 flow variables and 33 auxiliary variables. The logic equation for the SD model are described as below. The technological innovation capability of enterprise is mainly influenced by its staff's experience and the number of technical staff. Therefore, the enterprise's LCT innovation capability can be expressed as Eq. (1).

TTPA = INTEG (TPSA + LCPFA, I4 )

(8)

TTPA: amount of traditional projects, TPSA: amount of successful traditional projects, LCPFA: amount of failed low carbon projects, initial value is I4 . TLCPSA = INTEG (LCPSA, I5)

(9)

TLCPSA: total amount of successful low carbon projects, LCPSA: amount of successful traditional projects, I5 is the initial value of the system model. LCPSA = LCPCf A × LCPSAlookup (LCTIM )

(10)

LCPSA: amount of successful low carbon projects, LCPCf A: amount of finished low carbon projects, LCPSAlookup : the lookup function for the amount of successful low carbon projects, TIMD : LCT integration maturity degree.

(1)

LCIC : LCT innovation capability, RDP : enterprise technical personnel, LCTI : low carbon training investment, α1, α2 are the influential coefficient of the variables. Herein, it is supposed that the system simulation is mainly influenced by the form function. RDP = INTEG (RDH − RDQ, I1)

(4)

LCTII = PV *a

This causal feedback loop is based on LCT innovation management from the perspective of industry. According to the government incentive measures and relevant environmental laws or regulations, the cooperative innovation among the developer, design company, contractors and material suppliers leads to the decarbonization of the construction industry and low carbon projects gradually increase. The public recognition, market demand increase and profit target achievement of low carbon project stimulates more construction enterprises to participate into the new round of LCT innovation activities. It would cultivate an LCT innovation environment via the interaction among government, industry and market, which drives the low carbon transformation.

LCIC = RDP*α1 + LCTI *α2

(3)

EV = TPA*TPUV + LCPA*LCPUV

LCPCfinished A = Delayfixed (LCPCA, LCT , I6 )

(11)

LCPCfinished A: amount of finished low carbon projects, LCPCA: choosing amount of low carbon projects, LCT : low carbon project finished lead time, initial value is I6 . LCT integration maturity is related to the enterprise innovation

(2)

RDP : Enterprise's technical personnel, RDH : technical personnel hiring

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Selected Variables

higher than that of traditional projects by 20%. The unit output value of each traditional construction project is 14.9 million US$ and the associated carbon emissions is 2000 metric tons. The unit output value of each low carbon construction project is 17.9 million US$, and the associated carbon emissions is 1200 metric tons. Carbon emission trading price is compliance with the price released by CCE (Chicago Climate Change). In this model, the average price of US $1.95/ton is used. There are 100 units of traditional project market demand each year. The success rate of traditional project is 100%, while the rate of low carbon construction projects is negatively affected by the missing enterprise’s LCT integration maturity. The developer selection rate of low carbon projects mainly depends on its profit. If the integration of technology innovation fails, the particular system would automatically transfer the initial LCT projects into traditional projects. Government will set the total carbon emission reduction target every year for the enterprises. If the enterprise’s carbon emissions amount is above the upper limit of all construction projects, the system will force the developers and designers to move towards the low carbon project alternatives. The constraint conditions in this system are realized through a “if else then” function. Logically, the increase of low carbon construction projects will go up gradually together with the increase of government incentives, enterprise LCT innovation investment and LCT maturity. The number of enterprises participating in low carbon construction activities will also increase. Some parameters cannot be obtained from the literature. Therefore, some enterprises were interviewed either face-to-face method or via telephone. The interviewers are drawn from the enterprises in Yangpu District of Shanghai and construction enterprises in Suzhou city of China. The interviewers were drawn from various types of stakeholder, e.g. project managers, engineers, designers, project managers of contractors, building material manufacturers and the researchers from universities or R & D-centres. The raw data are processed through the weighted average method with an aim of transferring the qualitative factors into quantitative factors. In detail, the specific processing method is: assigning the value Sj (0 < Sj < 1) for each interview question respectively, supposing Mij is the person number choosing Sj for factor “i ”, Dj is the overall accumulative value of various factors in the model [61], namely:

80,000 ea 12 M Dmnl 3 4

3 3

40,000 ea 6 M Dmnl

4

2

3 4 4

2

0 ea 0 Dmnl

3 4

2 12 3

0

1

10

3

1

3

20

1

30

2 3

1

1

40

TTL TPSA(total traditional project successful amount ): TTL LCPSA(total low carbon project successful LCPEPA(low carbon participating enterprises amount): LCPP(low carbon project profit rate ):

4

3

4 1

2

50 60 Time (year)

4

1 2

3 4

100

1 2

3

2

90

1 2

3

4 1

2

80

1 2

4 1

2

70

1 4

4 1

2

4

ea

2 ea 3 4

ea Dmnl

Fig. 10. Benefit influence on the number of LC project and enterprises participants.

capability and the maturity of low carbon projects, it can be expressed as following:

LCTIM = ETICaplookup (ETICap )*LCPSAlookup (LCPSA)

(12)

LCTIM : LCT integrated maturity, ETICaplookup : lookup function of enterprise technology innovation capability. ETICap : enterprise technology innovation capability, LCPSAlookup : lookup function for the amount of successful low carbon projects, LCPSA: amount of successful low carbon projects. Another effect of LCT innovation is to drive the increase of enterprises’ level of participation and speeding up the transformation of traditional projects towards low carbon ones. In this system, it is assumed that the amount of LCT innovation enterprises are directly influenced by low carbon outputs and the number of the successful low carbon projects, then the function can be described as below: LCPEPA = LCPPlookup (LCPP )*LCPSAlookup (LCPSA)

(13)

LCPEPA: amount of enterprises participating in low carbon projects, LCPP : low carbon project profit, LCPSA: low carbon projects’ successful amount. LCPP = GIA + LCTP − LCII

5

Di =

(14)

LCPP : Low carbon project profit, GIA: government incentive amount, LCTP : low carbon emission transition profit. LCII : LCT integration investment. The carbon dioxide emissions of construction project are mainly affected by the technical integration maturity of project design, construction, operation and maintenance in the life cycle. Maintenance of technical maturity can be expressed as following: LCPCE = LCPCElookup (LCTIM )

∑ j =1 Mij Sj 5

∑ j =1 Mij

(16)

In addition, the SD modeling process is a way to put the invisible elements into system conceptualization, abstraction and streamline. It must go through repeated inspection and debugging to form the final model, from which the importance of verification in SD modeling process can be reflected. In general, the model is effective as long as the tests verify the model associated with modeling purposes and includes both the main structure and variables, and can reproduce the behavior of the real system. The model is verified via software VENSIM PLE (edition 5.94). The dimensional consistency meets the requirements of the model. The model of each equation is still meaningful even the extreme value of the equation has given. It indicates that the extreme condition inspection of the model equations conforms to the requirements. The model boundary is gradually expanded to make it accord with the requirement of the current research problem. As a result, the structure of model adaptability passes the related verification.

(15)

Where, LCPCE : low carbon project carbon emission,LCPCElookup : lookup function of low carbon project emission amount. LCTIM : LCT integration maturity. In the model functions, the value of α , αi, βi can be achieved through a long-term raw data tracking from enterprises and related regression analysis. Other data can be obtained from survey and interview (the related abbreviation or function is shown in Appendix A1).

5.3. Simulation 5.2. Model parameters and verification The modeling purposes of this paper are to explore how the intensity changes of LCT innovation driving force affects the numbers of low carbon project; and to examine the number of enterprises participants' changes on innovation activities in the system.

It is assumed that the completion of traditional construction project and the low carbon construction project takes 3 years and 4 years respectively. Meanwhile, the unit output value of low carbon projects is

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Selected Variables 100,000 0.6

ea

75,000 0.55

ea

50,000 0.5

ea

6 5

6

7 8

5

6 5

25,000 0.45

6

ea

5 6 5 5

0 ea 0.4

5

0

5

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56

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6

56

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50 55 Time (year)

60

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85

90

95

100 ea ea ea ea ea

TTL TPSA: market competition driving, 60% TTL TPSA: market competition driving, 40% LCPEPA: market competition driving, 60% LCPEPA: market competition driving, 40%

6

6

6

6

6

6

6

6

ea

LCPSA: market competition driving, 60% LCPSA: market competition driving, 40% 5

5

5

5

5

5

5

5

Fig. 11. Market competition drive influence on LCT innovation.

driving factors are kept unchanged, the number of the participating enterprises in low carbon construction projects does not change significantly. This indicates that the main driving force at the low carbon building project promotion stage is not from the market, but from other sources. As shown in Fig. 11, since the sixteenth year, the number of enterprises participating in low carbon projects staying under marketing completion driving degree (0.6)3 gradually exceeds the enterprise numbers under marketing completion driving degree (0.4), with a growth rate of 10–11%. It will take 40 years that low carbon construction projects amount exceed the traditional construction projects if the marketing completion driving degree is 0.4. However, it takes around 46 years to realize this goal if marketing completion driving degree is 0.6. This indicates that the market competition drive can promote decarbonization of the construction industries, however taking a longer period of time. This is probably because the number of enterprises participating in low carbon projects is small at the early promotion stage and is influenced by other driving forces.

5.3.1. Benefit influence on the numbers of low carbon projects and enterprise's participation The above analysis shows that the pursuit of economic efficiency and obtaining competitive advantage are the dominant driving forces for the construction enterprises to participate in the LCT innovation. It can be observed from the system simulation (Fig. 10) that at the early development stage of a particular low carbon construction project, driven by the policy requirements and economic interests, the number of participating enterprises in the LCT integration process grows rapidly with the profit increase of low carbon projects.2 The quantity of low carbon projects increases gradually and exceeds the number of traditional construction projects. As the overall benefit of low carbon projects gradually decreases, the quantity of enterprises participating in low carbon construction projects descends and finally remains at a certain low level. In this period, profit of low carbon projects also maintains a certain level. Meanwhile, results showed that the number of the low carbon projects would not decrease, but shows a slight increase. This indicates that, at the beginning, the economic interest is the main driving force. However, later on, the contribution of low carbon projects would be driven by driving factors other than economies. This is consistent with the reality. Currently China is in the early stage of low carbon transformation. The government's promotion of green economy and the strong financial support on low carbon projects encourages a number of enterprises to participate in low carbon construction projects, in order to gain the economic interest and respond to the regulations. The market is gradually mature by the time and the industry decarbonization target will be completed. Enterprise's willingness to participate in LCT innovation will gradually return to rational, but there is still a low participation activity. On the other hand, the increase of low carbon construction projects makes the construction industry market gradually change and forms a certain industry advantage. This improves the diffusion effectiveness of LCT innovation which drives the decarbonization within the construction industry.

5.3.3. Government incentives influence on numbers of LC project & enterprise participation The government subsidy is another driving force for enterprises to participate in LCT innovation projects. It is one of the main ways for enterprises to obtain certain economic profit and make up innovation investment balance. As shown in Fig. 12, the government subsidies are helpful to the promotion of low carbon construction projects. With the increase of government incentive, it takes less time for the number of low carbon construction projects exceeds that of traditional projects. When the subsidies coefficient is 0.7, it needs 56 years to accomplish this target. However, such time can be cut back to years when the subsidies coefficient is 0.8. The subsidies coefficient effect also reflects on the number of enterprises participating in LCT innovation activities. However, the effective degree is not very high. In the first period of eight years, the subsidies coefficient with 0.8 of the enterprises to participate in low carbon project activity is basically the same as the one with 0.7. By contrast, from the 9th year in the system, the number

5.3.2. Market competition influence on numbers of LC project & enterprise participation The market competition is a major driving force for the enterprises to participate in LCT integration. As shown in Fig. 11, if the other

3 Note: The coefficient value of technical innovation drive (like enterprise SER, market driving), technology innovation strength coefficient and LC tech integration maturity in the numerical simulation in the system is defined within 0~1. Because of the system software problem, herein we take % as numerical form in Fig. 11, the rest of figures takes the same format.

2 Note: the results from the first two years were shown as “0” due to the lag of the system, but it does not affect the further system simulation results and analysis.

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Selected Variables 200,000

ea $/metric tons

0.15

150,000 ea 0.14 $/metric tons

100,000 ea 0.12 $/metric tons

7

50,000 ea 0.1 $/metric tons

8

5

0 ea 0.09 $/metric tons

0

5

10

15

20

25

30

35

40

45

50 55 Time (?)

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100

TTL TPSA : govern incentive coefficient a=80% TTL TPSA : govern incentive coefficient a=70% LCPEPA : govern incentive coefficient a=80% LCPEPA : govern incentive coefficient a=70% TTL LCPSA: govern incentive coefficient a=80% TTL LCPSA : govern incentive coefficient a=70%

Fig. 12. Government subsidies influence on LCT integration performance.

Selected Variables Selected Variables

0.4 Dmnl 60,000 ea 0.4 29,850.7 $/metric tons

6,000 ea 1 Dmnl 2985.1 thousand $/metric ton 3,000 ea 0.5 Dmnl 1492.5 Thousand $/metric ton

3 5

0 Dmnl 0 ea 0.2 0 $/metric tons

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TTL TPSA : Current TT LCPSA : Current 2 LCTIM : Current Government incentive: Current 4 4

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100 Dmnl Dmnl ea

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$/metric ton

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0 ea 0 Dmnl 0 thousand

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1 1

5 1

1

0 LCTII coefficient a Enterprise SER TTL LCPSA Market drive Government incentive

5

3

1

50 60 Time (?)

1 2

3

1 2

3 4

70 1

2 3

4

80 1

2 3

4

90 1

2 3

4

2 3

4

100

ea ea 3 Dmnl Thousand $/metric ton

$/metric tons

Fig. 14. Impact on the number of low carbon projects trend when LCT integration maturity is 0.3.

Fig. 13. Driving force influence on enterprise investment intensity coefficient of LCT.

of participating enterprises with high coefficient of subsidies is significantly increased and higher than the one with a low subsidies coefficient. The performance growth rate is about 5% and tends to be stable gradually. This implies that the government incentive is not strong enough. Similarly, the single government incentive is not effective for the promotion of LCT innovation.

Selected Variables 20,000 ea 1 Dmnl

5.3.4. Driving forces influence on the strength of LCT innovation The driving forces of the participating construction enterprises on LCT innovation are, the internal demand (e.g. the environmental responsibility and technological progress needs) and the external requirements (e.g. the market competition and government incentives needs, etc.). In the practical decision making process, the influence effectiveness of each driving force will be affected by the prejudice of a particular enterprise decision maker. This decision maker will directly determine the coefficient value, such as the value of enterprise voluntary on environmental protection and the impact degree of market competition. In the system simulation, these two variables were adjusted in the range of 0.2~0.7. Results showed that these two variables have certain level of impacts on the LCT innovation performance; however the impact degree is not very significant. As shown in Fig. 13, in the beginning of the project lifecycle, the enterprise’s

0 ea 0 Dmnl

2

2

10,000 ea 0.5 Dmnl

12 3

0

4 1

10

TTL TPSA: Current LCPEPA: Current TTL LCPSA : Current LCTIM : Current

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1 3

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100 ea ea ea Dmnl

Fig. 15. Impact on the number of LCT projects trend when LCT integration maturity is 0.8.

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policy's influence on the quantity of low carbon projects and the number of enterprises participating into the LCT innovation. As shown in Figs. 14–16, the number of the low carbon construction projects is subject to the LCT integration maturity. At the initial stage, the quantity of the traditional construction projects is higher than that of the low carbon construction projects. As the system time goes on, the LCT integration maturity of enterprises maintains at a certain level. When the maturity degree is 0.3 (30%), it takes around 75 years for the number of low carbon projects to exceed that of traditional construction projects (Fig. 14). When the maturity degree is 0.8 (80%), the system needs 32 years to achieve such target (Fig. 17). On this basis, the incentive coefficient of LCT innovation is increased. When the subsidies coefficient is 0, the simulation curve is constant. When the incentive coefficient gradually increased from 0 to 0.3 (30%), the system begins to evolve. The time for the quantity of low carbon projects to exceed that of traditional projects gradually deceases, from the 75 years to 32 years, 26 years and 21 years (Figs. 14–16). This indicates that the quantity variation (increase or decrease) of low carbon projects in the system is sensitive to the changes of government incentives degree. It can be concluded that the government policy incentives can accelerate the decarbonization of the construction industry.

Selected Variables 20,000 ea 1 Dmnl

0 ea 0 Dmnl

2

2

10,000 ea 0.5 Dmnl

12 3

0

4 1

10

TTL TPSA : Current LCPEPA: Current TTL LCPSA : Current LCTIM : Current

4

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1 2 3

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1 2

2 3

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3 4

100 ea ea ea Dmnl

Fig. 16. Impact on the number of LC projects, when LCT integration maturity is 0.8 and subsidy coefficient is 0.3.

investment on LCT innovation is almost zero, but increases with the growing number of low carbon construction projects and the higher government incentives, which gradually reaches a certain degree of about 0.026 (or 2.6%). When the number of low carbon projects gradually increases in the system and exceeds the number of traditional project in the 36th year, the traditional construction projects hold a slow growth rate. This leads to the conclusion that the strength of enterprise's technological innovation is mainly affected by the government incentives and the number of successful low carbon projects in the system.

6. Discussion The dynamic mechanism is known as an incentive mechanism. This means that the market participants and the main internal staff are actively engaged in production, operation and other activities for development, driven by the interests [62]. This study reveals that the dynamic mechanism of LCT integrated innovation in the construction industry is dynamically affected by a number of factors such as the technology standard, market competition and policy environment. In essence, the management of LCT innovation is not only a process with regard to the dynamic evolution and the internal convergence of the internal participants in the construction industry, but also a process involving the conflicts of mutual interest and the balance of concerned parties. The dynamic mechanism of LCT integrated innovation in the construction industry includes a multiple-target, multiple-forces dynamic integrated mechanism and a technology innovation system with

5.3.5. LCT integration maturity and policy incentive influence on LC projects Various driving forces directly determine the capability of enterprise's LCT innovation and innovation inputs (such as the personnel and capital input). Therefore, the LCT integration maturity is chosen as a variable to further analyze its impact on the proportion of successful low carbon building projects and the number of participating enterprises. The government subsidies coefficient is adjusted to observe the

Fig. 17. LCT innovation incentive mechanism of multi-agent system collaboration.

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Push

Org. Integration

R&D institutions or universities

constractors construction company

government or other concerned participants

incertive mechanism Policy Integration

compelete system incentive constraint

Tech. integration

resource allocation performance evaluating

Cooperative Innovation

Adjust

Driving mechanism framework of low carbon technologu integration innovation

cnstruction suppller

market mechanism

system systematic

contract management carbon trading platform benefits distribution

tech innovation incentive

clarify cooperative targets

tech. std assurance

communication improvement

Std mgt.

establish credit evaluating system

multi-objectives

clear paticipating assignment

multi-technologies

Incentive constraints, system coordination, profit distribution, market regulation and coordination in the process control Fig. 18. Driving force management model and control framework.

tion within the participants and foster a positive innovation culture for the sustainable development. In this process, policy support, innovation purpose, concerned parties, innovation driving forces and other related forces have significant impacts on the dynamic mechanism model in different ways and form a transmission mechanism collectively. All these mechanisms interact with each other can be improved by establishing an organic system of integrated innovation cyclic network so that the goal of LCT integration can be achieved in the construction industry. Mukherjee and Muga [24] developed an integrated framework that allows reorganization and integration of existing sustainability research in the architecture, engineering, and construction (AEC) industry. Such framework emphasizes the perspective of decision-makers and stakeholders. The LCT innovation management in the construction industry involves multiple factors, such as the multi-participation, multiple driving factors, multi-technologies and uncertainty of technological innovation. The question is: how these multiple levels interact act and perform with positive outcome of the low carbon reduction? A new management mode is needed. The system integration of LCT, organization integration of the concerned parties and policy integration of system security need to be taken into consideration to facilitate implementation of the LCT integration. Therefore, an integrated technological innovation management model is required in construction projects. Such model should cover the organizational integration, technology integration, policy integration and multiple agent cooperation (see Fig. 18).

an aim of achieving the low carbon performance. It needs to consider the adoption of various technologies or techniques in different phases of projects such as design, construction, operation and disposal. The system coordination and necessary mechanism constraints from various aspects are also needed, such as the incentive mechanism, market mechanism, distribution mechanism and control mechanism etc. The dynamic mechanism combines the demand of the LC project, innovative features, existing equipment and resources (e.g. human resources and material resources) to form a new management mode (see Fig. 17). This incentive mechanism model consists of four levels. The first one is micro-level of innovation driving forces in enterprises. The concerned parties take projects’ low carbon performance requirements as the goal and allocate their internal resources (such as manpower, material and money) according to construction requirements and environmental needs of a project. In this process, the outcomes are determined by the enterprise innovation intention, innovation driving forces and technology maturity. At the second level, the concerned parties in technological innovation are well collaborated, including the developers, design companies, contractors, building material manufacturers, supervision companies, universities and R & D institutions, as well as the government. These organizations cooperate to achieve a LCT implementation through collaborative and management innovation. The third level refers to the environmental support of LCT integrated innovation, which includes environmental policy, environmental protection requirements, social requirements, economic requirements and cultural requirements. The fourth level includes the market mechanism, incentive mechanism, coordination mechanism and interest distribution mechanism. These four levels are affected by system conflict, system coordination, system collaboration of internal evolution and convergence process among the concerned parties as well. The purpose of the dynamic mechanism implementation is to effectively achieve the CO2 emissions control target. This requires government to effectively improve the willingness of technical innova-

7. Conclusions Technological system evolves similar to the biological evolution. Technology evolution is driven by some factors rather than accidental. Every kind of driving force follows certain principles [63]. This paper aims to identify the key driving factors of the LCT innovation in the construction industry and their dynamic interactions. An extensive literature review was 312

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achieve carbon emission control target. Very few studies attempted to use the integrated approach to manage various driving forces of the LCT innovation. To achieve the carbon emission control target, the cooperation amongst all stakeholders are critical. In terms of practical application, the findings of this research via SD simulation shows that the system needs at least 21 years to realize the quantity of low carbon construction projects, exceeding the traditional ones in construction sectors compared to the emission amount at the base year level. An integration of organization, technology and policy is needed to speed up the realization of low carbon transformation in China. This finding is very important for the government and practitioner in construction, Chinese government promised to have to reduce the intensity of CO2 emissions proportional to the gross domestic production by 40–45% by 2020, compared with the 2005 levels [66,67], then committed to have more reduction to 60–65%. China promised to stabilize carbon emissions by 2030 in a joint announcement with the United States, while at least 20% of its power will come from alternative sources by 2030 [68,69]. For the construction industry, it is a critical challenge to the enterprises and government [70,71]. Future research opportunities exist to examine the mechanism the integration efficiency works in the LCT innovation activities.

conducted to draw a preliminary list of driving forces, which was refined by means of questionnaire survey and expert interview. This is followed by SD modelling exercise to examine the interrelationships amongst these driving forces. The focus is placed on the influential mechanism and causal feedback paths of LCT innovation driving forces. This paper also explored the feedback path and its causal relationships with the LCT innovation driving force among the participants by means of conducting an evolution analysis step by step. Finally, an SD mechanism model of LCT innovation driving forces was established and the causal relationship was analyzed within the industry dynamic mechanism. This paper performed a critical analysis on the internal and external driving factors of the low carbon technology innovation based on an empirical study with SD approach. The results show that the driving forces of LCT innovation were sensitive to the number variation of low carbon projects and amount of the enterprises participating in the LCT innovation. All of these forces had positive impacts on achieving the low carbon performance target. It still takes time for the low carbon transformation of the construction industry. The effectiveness of one single driving force is limited. This is an innovative findings compared to the existing studies which focused on the qualitative exploration on the low carbon driving forces analysis from the perspective of social, economic and environment. In term of theoretical contribution, this paper constructed a conceptual model of LCT innovation incentive mechanism of multi-agent system collaboration, as well as a driving force management model and control framework for the LCT integration within the construction industry, based on the integrated system theory. Existing studies attempted to develop a framework for synergy effect of promoting and enhancing industrial independent innovation driving force [64] and adopted the technology push and demand pull methodological approach [65]. The technology innovation management model proposed in this study emphasizes a multi-agent system collaboration and integrated method. Findings provide decision makers with different lens through which to consider the innovation transition with an idea of integration to

Acknowledgements This research is supported by the Soft Science Research Project of Jiangxi Province in 2015 (No. 20151BBA0033), the Social Science Planning Project of Jiangxi Province (12th Five-year Plan) (No. 15GL28), the National Social Science Foundation of China (No. 11BJY143), the 58th China Postdoctoral Science Foundation (No. 2015M582393) and the 9th China Postdoctoral Special Foundation (No. 2016T90789). The National Natural Science Foundation of China (No. 71390523）and the Specialized Research Fund for the Doctoral Program of Higher Education (No. 20120072110055).

Appendix. A1 See: Table A1. Table A1 Table of used nomenclature. Abbreviation or function

Description

LCIC RDP LCTI α1, α2 RDP RDH RDQ EV TPA LCPA TPUV LCPUV LCTII PV a LCTII β1, β2 , ...β5 TPA TPCA TPSA LT LCPFA TTPA

LCT innovation capability enterprise technical personnel low carbon training investment the influential coefficient of the variables Enterprise’s technical personnel technical personnel hiring per year technical personnel quit per year enterprise total value traditional project amount low carbon project amount traditional project unit value, low carbon project unit value low carbon innovation investment enterprise projects value technological innovation investment coefficient LCT investment intensity the influential coefficient of each driving force amount of traditional projects choosing amount of traditional projects amount of successful traditional projects traditional project accomplishment lead time amount of failed low carbon projects amount of traditional projects (continued on next page)

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Table A1 (continued) Abbreviation or function

Description

TLCPSA LCPSA LCPCf A

total amount of successful low carbon projects amount of successful traditional projects amount of finished low carbon projects

LCPSAlookup

the lookup function for the amount of successful low carbon projects LCT integration maturity degree. amount of finished low carbon projects

TIMD LCPCfinished A LCTIM ETICaplookup ETICap LCPSAlookup

LCPSA LCPEPA LCPP LCPSA GIA LCTP LCII LCTIM

LCT integrated maturity lookup function of enterprise technology innovation capability enterprise technology innovation capability lookup function for the amount of successful low carbon projects amount of successful low carbon projects amount of enterprises participating in low carbon projects low carbon project profit low carbon projects’ successful amount Government incentive amount low carbon emission transition profit LCT integration investment LCT integration maturity

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