3 Conceptual Framework: Systems Based Assessment of China’s Residential Electricity Sector
3.5 Overview of the Conceptual Framework
This section presents a more detailed description of the conceptual framework adopted by this study. It is based on four pillars which link a particular approach of ‘Thinking’ to one or multiple complexity dimensions which have been identified as present in the reform of the Chinese electricity sector (Table 3.1).
The main requirement of the conceptual basis underpinning this research is to create understanding of the context in which the reform takes place. Content and dynamics both play an important yet secondary role. In line with Churchman (1967), who stated that “the systems approach begins when first you see the world through the eyes of another”, the conceptual framework facilitates the investigation of different perspectives of
stakeholders. The aim is to identify and understand areas of concern from the ‘inside’, as they are seen by those affected by the reform.
Diagram 3.4 Setting the Systems Boundary through the Selection of Stakeholder Perspectives
The selection of stakeholder perspectives to be included in the study firstly addresses the complexity dimension of openness. The decision of whose views to consider draws a boundary around the system under investigation. The system boundary defines the
85 problem itself. Secondly, in addition to revealing perspectives themselves, shared as well as conflicting views amongst different stakeholders are disclosed. The decision of whose views to include has direct implications for the requirements for the solution. Diagram 3.4
illustrates how the boundary setting could exclude certain stakeholders from the analysis.
The decision which stakeholder views to consider is of outmost importance, in particular as the study is concerned with equity implications of an electricity reform.
Diagram 3.5 Understanding Complexity through Systems Thinking
Diagram 3.5 uses the iceberg metaphor to illustrate how each of the complexity dimensions relevant to an energy transition (see Table 3.1) link to a particular way of Thinking. This distinction could be useful for the development of a methodological approach in the next chapter.
The first pillar of the framework is concerned with identifying and understanding the events which fall within the system boundaries. These events are observable but perceived differently depending on the position within the system from where they are viewed.
Relevant events could include a pollution incidence, relate to the general economic climate, people’s living standards or personal well-being and health. The identification of events forms the starting point of understanding parts of the problem which manifests itself as trends, patterns of events and the causal structure of the system. The system boundary determines which events form the basis of the analysis. It provides clarity on the definition of the problem as well as the solution. Excluding environmental concerns for example (i.e. by excluding stakeholders, who regard environmental quality as important, from the study) would result in the derivation of a system structure where energy related pollution is dropped as an objective of the electricity reform. Ignoring certain events could compromise an equitable outcome of the reform.
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The second pillar is concerned with understanding patterns of events. Observable patterns link events with each other and provide a starting point to identify the dynamic
relationships which occur within the electricity sector. Complexity at this level is related to the uncertainty of how dynamic relationships generate and change events through
complex feedback mechanisms, delayed and non-linear (i.e. disproportionate) responses to a change of a system variable.Understanding these mechanisms which underlie the causal relationships is key to understanding how a change to any system variable, affected by a carbon market for example, influences other seemingly unrelated parts of the system over time. Recognising the dynamics of a system requires awareness of the system structure itself.
The third pillar of the conceptual foundation is concerned with understanding the causal relationships underlying the structure of the system. Cause-and-effect relationships are shaped by complexity inherent in co-evolutionary, path dependent and self-organising processes. The intention of any intervention is to influence causal relationships between system variables. The introduction of a carbon market changes cause-and-effect
relationships, which translate into new or different dynamics, patterns and ultimately events.
The fourth pillar of the conceptual framework closes the analysis by making sense of the system structure. It does this by attempting to grasp the complexity of social reality which is captured by the structural systems model. The analysis goes deeper than the
investigation into stakeholder objectives and preferences (Pillar 1). It seeks to establish the influence of cultural and social norms, personal attitudes on the problem itself. These are the factors which are not explicit in the system structure (Pillar 3) and its underlying dynamics (Pillar 2). People making decisions within a particular political, social and cultural setting do so under conditions of ‘bounded rationality’. Price based policies, in particular, are vulnerable to unforeseen and intended reactions of people. When faced with economic decisions, people often do not follow the ideal of the perfectly rational ‘homo economicus’
of traditional economic theory (Sterman, 2000). Understanding attitudes towards the environment and motivators for pro-ecological behaviour could provide valuable lessons for the prevention of policy resistance and policy failure.
3.6 Conclusion
The complexity inherent in energy transitions makes the investigation into the reform of an electricity sector an overwhelming challenge, particularly as the focus shifts from
developed nations to fast developing countries such as China.
A framework based on Systems Thinking can assist the analysis by elucidating the various dimensions of complexity. This chapter demonstrated that there appears to be value in applying approaches and models that incorporate Systems Thinking. By framing Systems Thinking as a way of ‘Thinking’ rather than a heuristic, complexity inherent in the market based changes to the Chinese electricity sector can be revealed and understood. An
87 iceberg was used as a metaphor to represent a model illustrating the hierarchy of levels of understanding. An iceberg consists of a relatively small amount of ice above the surface and a much larger mass of ice underneath the surface. In the hierarchy of explanations of observable events and invisible patterns and structures, the lower level of the iceberg gives context and meaning to the higher level (Vandenbroek, 2015). Typically, interventions attempting to solve a problem target a single event and disregard the enormous mass of structural factors that are underneath the surface. Well-intentioned efforts frequently lead to policy resistance as there is no or only little awareness as to how a system will adapt in response to the intervention. Interventions are delayed, diluted or defeated by the unforeseen reactions of people and the environment (Sterman, 2000).
The Chinese government has been committed to sustainable development as a policy goal.
In particular, the reform of the energy sector has been supported by an array of new policies. Despite progress in some areas such as the deployment of renewables, socially and environmentally motivated policies failed to achieve the intended outcomes often due to factors linked to the political, social and cultural factors, which need to be considered in the ‘human’ context of a residential electricity sector reform. The chapter demonstrated that Systems Thinking could provide the conceptual basis to deal with the complexities of an energy sector reform. What is required now is a methodological approach to create knowledge to further elucidate complexity occurring within the invisible parts of the system.
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