**3. Dilemma Analysis of Energy-Saving Renovations of Existing Rural Residential Buildings**

#### *3.1. Positive Externality of Energy-Saving Renovation Market*

Positive externality means that the marginal private cost is greater than the marginal social cost, that is, the marginal private benefit is less than the marginal social benefits, such as energy conservation, emission reductions, and low-carbon construction. At present, China has made some achievements in improving energy efficiency, but there is still a long way to go in terms of energy-saving renovations to existing buildings due to strong positive externalities and proneness to "market failure". In the energy-saving renovation of existing rural residential buildings, participants often only consider the benefits and costs related to their own interests, ignoring all other unrelated factors. For example, rural residents, as users of existing buildings, can not only improve their living standards, reduce building energy consumption, save use and maintenance costs, and benefit their physical and mental health, but also reduce the total energy consumption of the whole society, reduce environmental pollution, and improve the surrounding living environment. However, in the market mechanism, rural residents predominantly care about the maximization of their own interests, instead of the marginal benefits brought to society, since this "extra income" will not bring them extra rewards. In addition, the process of energy-saving renovations will inconvenience residents' daily life and will increase their economic burden. Rural residents' attention is drawn to the renovation costs, ignoring the "positive externalities" brought about by energy-saving renovations of existing rural residential buildings to the wider society. As a result, many of them choose to forego energy-saving renovations.
