Incentives for green retrofits: An evolutionary game analysis on Public-Private-Partnership reconstruction of buildings

Abstract

To solve the problems of existing buildings with high energy consumption, the government has organized for private sectors to implement green retrofits for the Public-Private-Partnership reconstruction of buildings (PPP-BR). However, most private sectors are reluctant to implement green retrofits because of high costs, low benefits and long payback periods. The existing literature analyzed PPP-BR projects, barriers and incentives of green retrofits. However, it does not provide any quantitative method to illustrate the effectiveness of incentives and the strategy changes of investment groups. To fill this gap, this paper reveals the game strategy change of encouraging green retrofits and implementing green retrofits in government groups and investment groups through an evolutionary game analysis. On this basis, the case simulation method is used to change the parameters to analyze the incentive effectiveness and the strategy change of green retrofitting by investment groups. It can be found that the final evolutionary game results will take on two forms: first, the government groups encourage green retrofits, and the investment groups implement green retrofits; second, the government groups do not encourage green retrofits, and the investment groups do not implement green retrofits, respectively. When the government groups highly encourage green retrofits, the investment groups will also increase its willingness to implement green retrofits. The simulation results show that reducing costs and increasing benefits will promote green retrofits; however, this incentive measure will be limited by objective conditions. Comparatively speaking, the policy incentive measures are less affected by an objective environment, but positive policy incentive measures will get negative effects. In contrast, negative policy incentive measures that may cause problems will be most effective. Therefore, the combination of positive and negative policy incentive measures will be the better and more moderate way to promote green retrofits for PPP-BR.