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‘Polluters or Stakeholders, Who Should Pay?’ Development of a More Effective Waste Charging Scheme in Hong Kong using System Dynamics

Principal Investigator: Wilson W.S. LU
Funding body: PPR

Abstract

Amongst the many construction waste management (CWM) policies, the Construction Waste Disposal Charging Scheme (CWDSC) enacted in 2006 has the largest magnitude in terms of genuinely reducing construction waste disposal of at landfills. This strengthens the belief that “attempts to significantly reduce waste generation would not be possible in the absence of major economic incentives to drive the requisite behavioral change” (HKEPD, 2012). Nevertheless, CWM remains a gloomy situation after the CWDCS was successfully implemented in Hong Kong. With the changing socio-economic background in Hong Kong, there is an acute need for Hong Kong to become a self-sustainable place for managing its construction waste. Raising the existing levels of waste disposal charging is high on the Government’s agenda. This project investigated how much stakeholders are willing to pay for enhancing CWM in Hong Kong. The research will provide a scientific foundation to the heated on-going debate on revisiting the construction waste disposal charges in Hong Kong.

Objectives

  1. To identify stakeholders in construction waste management.
  2. To analyse stakeholders’ interests, attitudes, and interactions in construction.
  3. To construct a system dynamics (SD) model for simulating stakeholders’ interests, attitudes, and interactions under different waste charging schemes.
  4. To validate the SD model and interpret its policy implications in Hong Kong studies.

Results

By considering the dynamic nature of CWM, the research team has examined stakeholders’ interests, attitudes, and interactions using system dynamics (SD). It is found that SD, if applied correctly, is very helpful in determining how much one SHOULD be charged to achieve a pre-set goal of CWM. However, it is difficult to use SD to determine how much one WOULD pay for better managing C&D waste in Hong Kong. The research team thus deviated from previous objectives but to (a) examine the effectiveness of the existing CWDCS, and (b) explore the willingness to pay (WTP) expressed by CWM stakeholders in Hong Kong.

Surprisingly, it is found that, in statistical sense, there is no significant difference between willingness to pay (WTP) expressed by different stakeholder groups. The average maximum WTP is around HK$232 per tonne for C&D waste disposal of at landfills, HK$186/t at off-site sorting facilities (OSFs), and HK$120/t at public fill reception facilities (OFRFs). These are higher than the existing charges (i.e. HK$125/t for landfilling, HK$100/t for OSFs, and HK$27/t for PFRFs) but much lower than the charges proposed by HKGBC and HKBEC to the government Environment Bureau (i.e. HK$125, HK$700 and HK$1,200 per tonne in 2015, 2020 and 2025 respectively). The PI was interviewed by New York Times, and was invited to join the JWG to contribute to CWM policy making directly. The research team has achieved much more than what proposed in the PPR project. 

Outputs
Selected peer-reviewed journal papers

  • Lu, W.S. (2013). Beyond the inert and non-inert dichotomy: towards ‘building a zero waste Hong Kong’. Build Journal, 13, 46-49.
  • Lu, W.S., and Yuan, H. (2013). Investigating waste reduction potential in the upstream processes of offshore prefabrication construction. Renewable and Sustainable Energy Reviews, 28, 804-811.
  • Lu, W.S., and Tam, V. W. (2013). Construction waste management policies and their effectiveness in Hong Kong: A longitudinal review. Renewable and Sustainable Energy Reviews, 23, 214-223.
  • Yuan, H., Lu, W.S., and Hao, J. J. (2013). The evolution of construction waste sorting on-site. Renewable and Sustainable Energy Reviews, 20, 483-490.
  • Lu, W., and Yuan, H. (2012). Off-site sorting of construction waste: What can we learn from Hong Kong?. Resources, Conservation and Recycling, 69, 100-108.

Application of Hong Kong Construction Waste Management Experience in Mainland China: An Empirical Exploration

Principal Investigator: Wilson W.S. LU
Funding body: NSFC

Abstract

There is a huge demand for construction, which in turn generates a huge amount of construction waste. Various technical, economical, and managerial measures, which are largely based on the waste hierarchy including reduction, reuse, and recycle (3R), have been implemented in Hong Kong to deal with the construction waste. It is considered that the CWM experience provides valuable references to developing effective CWM practices in Mainland China. The aim is to identify effective policy, technical and economical CWM measures in Mainland China. It is envisaged that these measures, and waste generation, against the broader Political, Economic, Social, Technological, Environmental, and Legal (PESTEL) contexts, will form a complicatedly dynamic system. Based on the systems thinking, an artificial neural network (ANN) model is to be developed to mimic the system and embrace its complexity. A large set of longitudinal panel data of the factors will be gleaned from various sources to “train” the model. Academically, it links the various theories on CWM with the pressing CWM issues in China. It is anticipated that China’s characteristics such as large scale, massive volume, will lead to an improved understanding of how these CWM theories can be supported or refuted in a unique context. Practically, the project can assist various local authorities to develop more effective CWM measures in China.

Objectives

  1. To identify effective policy, technical and economical CWM measures in Mainland China.
  2. To link the various theories on CWM (e.g. stakeholder theory, “polluter pays principle”, 3R CWM hierarchy) with the pressing CWM issues in China.
  3. To improve the understanding of how these CWM theories can be supported or refuted in a unique context.
  4. To assist various local authorities to develop more effective CWM measures in China.

Results

  1. The project identified waste reduction potential in prefabrication and on-site sorting, off-site sorting, and suggested policies and strategies for improving CWM based on the inert and non-inert dichotomy of construction waste;
  2. The project linked various theories including stakeholder, polluter pays principle, and Coarse Theorem to improve CWM, and enhanced the understanding of how these theories can be supported and refuted in the context of Hong Kong and Mainland China;
  3. The project team transferred knowledge in CWM across countries, including China, Italy, and Spain.

Outputs

Selected peer-reviewed journal papers

  • Lu, W.S., Webster, C., Peng Y., Chen, X., and Zhang, X.L. (2016). Estimating and calibrating the amount of building-related construction and demolition waste in urban China. International Journal of Construction Management, Forthcoming.
  • Lu, W.S., Chen, X., Ho, D.C., and Wang, H.D. (2016). Analysis of the construction waste management performance in Hong Kong: the public and private sectors compared using big data. Journal of Cleaner Production, 112, 521-531.
  • Lu, W.S., Peng, Y., Webster, C., and Zuo, J. (2015). Stakeholders’ willingness to pay for enhanced construction waste management: A Hong Kong study. Renewable and Sustainable Energy Reviews, 47, 233-240.
  • Lu, W.S. and Tam, V.W.Y. (2013). Construction waste management policies and their effectiveness in Hong Kong: A longitudinal review. Renewable and Sustainable Energy Reviews, 23, 214-223.

RFID-Enabled Building Information Modeling (BIM) Platform for Prefabrication Housing Production in Hong Kong

Principal Investigator: G.Q. HUANG (PI), Wilson W.S. LU (Co-I), S.T. NG (Co-I), Q.P. SHEN (Co-I)
Funding body: ITP/045/13LP

Abstract

This project proposes to develop an RFID-enabled service-oriented BIM platform for enhancing prefabrication housing production in Hong Kong. The proposal is firmly built upon R&D strengths accumulated among the applicant and collaboration organizations including The University of Hong Kong, The Hong Kong Polytechnic University, and Hong Kong Housing Authority. The platform provides three sets of innovative technical deliverables. The first set includes core technologies that help creating smart construction infrastructure where real-time construction data are captured using advanced ubiquitous devices. The second set includes service-oriented decision support systems for facilitating decisions and operations at three key stages of the house construction project lifecycle (prefab production, prefab logistics and house construction with prefabs). The third set includes real-time information traceability, visibility and interoperability tools that integrate and interact with existing information systems. The use of the platform will facilitate (1) seamless communication and coordination among multiple stakeholders throughout the project lifecycle, (2) more efficient cross-border prefabrication logistic and supply chain management (LSCM), and (3) better coordination at construction sites for Just-In-Time (JIT) housing production.

Objectives

  1. Seamless communication and coordination among multiple stakeholders through improved information interoperability between processes.
  2. More efficient cross-border prefabrication logistic and supply chain management (LSCM) through improved its real-time information visibility and traceability.
  3. Seamless communication and coordination around construction site to enable a Just-in-Time (JIT) housing production.

Results

  1. Smart construction objects (SCOs) and gateway are developed to capture the real-time construction data.
  2. The RBIMP traceability tool allows identification of objects in a fully automated manner. The RFID tags are embedded in the prefab parts and goes through the whole lifecycle of construction projects.
  3. RBIMP-DSIS works as an information sharing adapter so that all the heterogeneous data sources could be seamlessly integrated.

Outputs

Selected peer-reviewed journal papers

  • Chen, K., Lu, W., Peng, Y., Rowlinson, S., and Huang, G. Q. (2015). Bridging BIM and building: From a literature review to an integrated conceptual framework. International journal of project management, 33(6), 1405-1416.
  • Niu, Y., Lu, W., Chen, K., Huang, G. G., and Anumba, C. (2015). Smart Construction Objects. Journal of Computing in Civil Engineering, 04015070.
    Flanagan, R., Jewell, C., Lu, W.S., and Pekericli, K. (2014) Auto-ID – Bridging the physical and the digital on construction projects. Chartered Institute of Building. ISBN 1853800191. 38p.

Selected international conference papers

  • Chen, K. and Lu, W.S. (2015). A BIM-Centred System for Buffer Management. In Proceedings of Going north for sustainability: Leveraging knowledge and innovation for sustainable construction and development, 23-25 Nov 2015, London.
  • Chen, K., Lu, W.S., Peng, Y., Zheng, L.Z., Niu, Y.H., and Rowlinson, S. (2015). An investigation of the latent barriers to BIM adoption and development. In Proceedings of the 20th International Symposium on Advancement of Construction Management and Real Estate, 23-25 Oct 2015, Hangzhou, China.

Exploring the Effects of Building Information Modeling on Project-based Organisations: A Social Network Approach

Principal Investigator: Wilson W.S. LU
Funding body: GRF

Abstract

Building information modeling (BIM) has emerged as probably the biggest buzzword in the construction industry in recent years. However, although extensive BIM research has been undertaken to date, little has been done to understand how BIM actually affects project teams (also termed as Project-Based Organisations [PBOs] in literature). The proposed study aims to investigate how BIM, as a facilitating technology, will affect PBOs, with a view to diagnosing its efficacy in delivering project value to society. The study will take the theoretical stance that PBOs are social networks (SNs). It is postulated that the use of BIM will change the PBO as well as its associated SN by facilitating communication and encouraging collaboration, thereby improving project performance. The proposed aims will be achieved by conducting case studies with the Hong Kong Housing Authority (HKHA). The project’s findings will enrich the research literature about the effects of facilitating technologies on PBOs. They will also have significant practical value by helping stakeholders in a PBO to understand how different BIM implementation modes affect the functioning of PBO. In the long run, the research will enable more appropriate BIM adoption and implementation in the construction industry.

Objectives

  1. To map the project-based organisations (PBOs) into social networks by introducing a novel social network analysis (SNA) approach;
  2. To ascertain the empirical impacts of building information modeling (BIM) on the social networks.

Results

The project is still undergoing. The three hypotheses have been tested using the housing projects undertaken by the HKHA. The sample covers 27 large housing estates comprising 103 projects where BIM has been implemented under different modes, and 120 projects without BIM elements involved. Changes of BIM on PBOs, for the first time, are both measured quantitatively and monitored graphically. By conducting the research work of this project, the principle investigator, Dr. Wilson Lu has received two “Certificates of Appreciation” from the HKHA for the R&D works on “Cost Benefit Analysis on the use of BIM for construction projects” and “Logistic management with the adoption of RFID and BIM”. These show the recognition by one of the most important public organisations in Hong Kong.

Outputs

Selected peer-reviewed journal papers

  • Wang, H.D., Lu, W.S., Soderland, J., and Chen, K. (2016). The interplay between formal and informal networks in project-based organizations. International Journal of Project Management, under review.
  • Liang, C., Lu, W.S., Rowlinson, S., and Zhang, X.L. (2016). Development of a multifunctional BIM maturity model. ASCE Journal of Construction Engineering and Management, Forthcoming.
  • Lu, W., Fung, A., Peng, Y., Liang, C., and Rowlinson, S. (2015). Demystifying Construction Project Time–Effort Distribution Curves: BIM and Non-BIM Comparison. Journal of Management in Engineering, 31(6), 04015010.
  • Lu, W., Fung, A., Peng, Y., Liang, C., and Rowlinson, S. (2014). Cost-benefit analysis of Building Information Modeling implementation in building projects through demystification of time-effort distribution curves. Building and Environment, 82, 317-327.

Selected international conference papers

  • Zheng, L.Z., Lu, W.S., Chen, K., and Chau, K.W. (2016). Moral Hazard in Inter-Firm Cooperation: A Study of Building Information Modelling Implementation. In Proceedings of the Academy of Management 2016 Annual Meeting, 5-9th Aug 2016, in Anaheim, CA.
  • Wang H.D., Lu W.S., and Sunderland, J. (2016). The Interplay Between Formal And Informal Networks in Construction Projects. In Proceedings of the CIB World Building Congress WBC16, 30 May-3 Jun 2016, Tampere, Finland.

 

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The Paradoxical Link between Corporate Social Responsibility and Financial Performance: Evidence from International Construction Business

Principal Investigator: Wilson W.S. LU
Funding body: GRF

Abstract

Corporate social responsibility (CSR) has gradually become the Quadruple Bottom Line in business. To provide the legitimacy of CSR, researchers have endeavored to find a link between CSR and corporate financial performance (CFP). This study offers and tests a “paradoxical link” between CSR and CFP—CSR may be detrimental to financial performance in the short term (e.g. by reducing carbon emission, or taking account of fair trade) but will be conducive to improving performance in the long term (e.g. by developing reputation, or improving business relationships). Drawing on CSR theories, this study will develop an empirically plausible model to reflect the paradoxical CSR-CFP link. A large set of longitudinal panel data of international construction companies (ICCs) will be derived from various sources including Engineering-News Record, Fortune, and annual reports of ICCs along with their CSR disclosures. Cross-sectional regression and lagged analyses will be conducted to test the hypothesis. The research project will have profound academic and practical values. Academically, the research may provide fresh answers to the moot question regarding the CSR-CFP link. Practically, it will help explain some CSR dilemmas, such as executives’ hesitation to fully engage in CSR despite the rhetorical exhortations of its benefits.

Objectives

  1. To model the paradoxical link between Corporate Social Responsibility (CSR) and Corporate Financial Performance (CFP);
  2. To empirically test the CSR-CFP model by putting it into the rich context of international construction business;
  3. To identify a set of business cases that can help interpret the CSR-CFP link by using international construction companies (ICCs) as case studies.

Results

  1. Explore the key trends in CSR reporting by top international construction companies, with a view to examining its convergence to reporting guidance such as the Global Reporting Initiative (GRI);
  2. Empirically test the revert U relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP);
  3. Empirically test the paradoxically relationship between Corporate Social Performance (CSP) and Corporate Financial Performance (CFP).

Outputs
Selected peer-reviewed journal papers

  • Wang, H., Lu, W.S., Ye, M., and Chau, K.W. (2016). The curvilinear relationship between corporate social performance and corporate financial performance: evidence from the international construction industry. Journal of Cleaner Production. Under review
  • Xiong, B., Lu, W.S., Skitmore, M., Chau, K.W., and Ye M. (2016). Virtuous nexus between corporate social performance and financial performance: A study of construction enterprises in China. Journal of Cleaner Production. Under review
  • Lu, W.S., Ye, M., Flanagan, R., and Ye, K. (2015). Corporate Social Responsibility Disclosures in International Construction Business: Trends and Prospects. Journal of Construction Engineering and Management, 142(1), 04015053.
  • Lu, W.S., Ye, K., Flanagan, R., and Jewell, C. (2013). Nexus between contracting and construction professional service businesses: Empirical evidence from international market. Journal of Construction Engineering and Management, 140(2), 04013049.
  • Lu, W.S. (2014). Corporate Social Responsibility (CSR) in international construction, pp 198-217. In Liu, J.Y. (ed.) Frontiers and Key Trends in Construction Management Research. China City Press: Beijing (in Chinese)
  • Lu, W.S., Chau, K. W., Wang, H., and Pan, W. (2014). A decade’s debate on the nexus between corporate social and corporate financial performance: a critical review of empirical studies 2002–2011. Journal of Cleaner Production, 79, 195-206.
  • Lu, W.S. (2014). Reliability of Engineering News-Record international construction data. Construction Management and Economics, 32(10), 968-982.