Allocation of Environmental Responsibilities in the Prefabricated Construction Supply Chain: Exploring the Influence of Government Subsidies
Publication: Journal of Construction Engineering and Management
Volume 150, Issue 11
Abstract
Prefabricated construction has shifted a portion of environmental responsibilities (ERs) from on-site to off-site, prompting a focus on the entire supply chain. As an issue emerging alongside the prefabricated construction, ERs are yet to be clearly allocated along the supply chain. This study aims to explore the optimal allocation of ERs between the agents involved in a prefabricated construction supply chain (PCSC), considering two distinct types of government subsidies, namely, subsidies based on ER levels (EL subsidy) and subsidies based on ER incremental costs (EC subsidy). Additionally, it aims to compare the influence of two types of government subsidies on this allocation process. A three-stage supply-chain Stackelberg model involving the government, a supplier, and a contractor was established to analyze their optimal decisions and a numerical analysis based on a case was further exploited to validate the results. The study revealed a positive correlation between ER levels of the entire supply chain and the ER managerial efficiency of both agents under each type of subsidy. The ER allocation between the two agents varied depending on the subsidy type. With EL subsidies, the allocation of one’s ER level was contingent on its own ER managerial efficiency, while under EC subsidies, the optimal allocation of ERs between the two agents was equal. No subsidy could simultaneously render both agents more profitable than the alternative subsidy, but optimal profits were largely determined by the ER managerial efficiency of the involved agents. By comparing subsidy effectiveness indicators, it was found that EL subsidies are deemed more beneficial for the construction environment than EC subsidies. The findings can serve as a valuable reference for government authorities to incentivize ER behaviors and help enterprises in the supply chain achieve a win-win situation.
Get full access to this article
View all available purchase options and get full access to this article.
Data Availability Statement
All data, models, and code generated or used during the study appear in the published article.
Acknowledgments
This work was supported by National Natural Science Foundation of China (NSFC) (Grant ID: 72301045), Natural Science Foundation of Sichuan Province of China (Grant ID: 2023NSFSC1024), and Fundamental Research Funds for the Central Universities (Grant ID: 2022CDJSKPT25).
References
Aslam, M. S., B. Huang, and L. Cui. 2020. “Review of construction and demolition waste management in China and USA.” J. Environ. Manage. 264 (Jun): 110445. https://doi.org/10.1016/j.jenvman.2020.110445.
Belayutham, S., V. A. Gonzalez, and T. W. Yiu. 2016. “Clean-lean administrative processes: A case study on sediment pollution during construction.” J. Cleaner Prod. 126 (Jul): 134–147. https://doi.org/10.1016/j.jclepro.2016.02.091.
Cao, X., X. Li, Y. Zhu, and Z. Zhang. 2015. “A comparative study of environmental performance between prefabricated and traditional residential buildings in China.” J. Cleaner Prod. 109 (Dec): 131–143. https://doi.org/10.1016/j.jclepro.2015.04.120.
Cho, K., S. Ahn, K. Park, and T. W. Kim. 2021. “Schedule delay leading indicators in precast concrete construction projects: Qualitative comparative analysis of Korean cases.” J. Manage. Eng. 37 (4): 04021024. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000915.
Du, Q., T. Bao, Y. Li, Y. Huang, and L. Shao. 2019. “Impact of prefabrication technology on the cradle-to-site CO2 emissions of residential buildings.” Clean Technol. Environ. Policy 21 (7): 1499–1514. https://doi.org/10.1007/s10098-019-01723-y.
Du, Q., T. Hao, Y. Huang, and Y. Yan. 2022. “Prefabrication decisions of the construction supply chain under government subsidies.” Environ. Sci. Pollut. Res. 29 (39): 59127–59144. https://doi.org/10.1007/s11356-022-19861-0.
Du, Q., Q. Pang, T. Bao, X. Guo, and Y. Deng. 2021. “Critical factors influencing carbon emissions of prefabricated building supply chains in China.” J. Cleaner Prod. 280 (Jan): 124398. https://doi.org/10.1016/j.jclepro.2020.124398.
Goodier, C., and A. Gibb. 2007. “Future opportunities for offsite in the UK.” Construct. Manage. Econ. 25 (6): 585–595. https://doi.org/10.1080/01446190601071821.
Han, X., M. Khouja, and X. Liu. 2023. “A dynamic model considering consumer green awareness and environmental subsidy.” Int. J. Prod. Econ. 260 (Jun): 108840. https://doi.org/10.1016/j.ijpe.2023.108840.
Hu, R., K. Chen, W. Fang, L. Zheng, and J. Xu. 2022. “The technology-environment relationship revisited: Evidence from the impact of prefabrication on reducing construction waste.” J. Cleaner Prod. 341 (Mar): 130883. https://doi.org/10.1016/j.jclepro.2022.130883.
Huang, L. Z., G. Krigsvoll, F. Johansen, Y. P. Liu, and X. L. Zhang. 2018. “Carbon emission of global construction sector.” Renewable Sustainable Energy Rev. 81 (Jan): 1906–1916. https://doi.org/10.1016/j.rser.2017.06.001.
Hussain, J., Y. Pan, G. Ali, and Y. Xiaofang. 2020. “Pricing behavior of monopoly market with the implementation of green technology decision under emission reduction subsidy policy.” Sci. Total Environ. 709 (Mar): 136110. https://doi.org/10.1016/j.scitotenv.2019.136110.
Hussein, M., and T. Zayed. 2021. “Critical factors for successful implementation of just-in-time concept in modular integrated construction: A systematic review and meta-analysis.” J. Cleaner Prod. 284 (Feb): 124716. https://doi.org/10.1016/j.jclepro.2020.124716.
Jaillon, L., and C. S. Poon. 2008. “Sustainable construction aspects of using prefabrication in dense urban environment: A Hong Kong case study.” Construct. Manage. Econ. 26 (9): 953–966. https://doi.org/10.1080/01446190802259043.
Jiang, W., and X. Chen. 2016. “Optimal strategies for low carbon supply chain with strategic customer behavior and green technology investment.” Discr. Dyn. Nat. Soc. 2016 (1): 9645087. https://doi.org/10.1155/2016/9645087.
Kofoworola, O. F., and S. H. Gheewala. 2009. “Estimation of construction waste generation and management in Thailand.” Waste Manage. 29 (2): 731–738. https://doi.org/10.1016/j.wasman.2008.07.004.
Li, X., W. Xie, T. Yang, C. Lin, and C. Y. Jim. 2023. “Carbon emission evaluation of prefabricated concrete composite plates during the building materialization stage.” Build. Sci. 232 (Mar): 110045. https://doi.org/10.1016/j.buildenv.2023.110045.
Li, Z., Y. Pan, W. Yang, J. Ma, and M. Zhou. 2021. “Effects of government subsidies on green technology investment and green marketing coordination of supply chain under the cap-and-trade mechanism.” Energy Econ. 101 (Sep): 105426. https://doi.org/10.1016/j.eneco.2021.105426.
Lindhqvist, T. 2000. “Extended producer responsibility in cleaner production.” Ph.D. thesis, International Institute for Industrial Environmental Economics, Lund Univ.
Liu, G., R. Huang, K. Li, A. Shrestha, and X. Fu. 2022. “Greenhouse gas emissions management in prefabrication and modular construction based on earned value management.” J. Constr. Eng. Manage. 148 (6): 04022034. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002268.
Liu, S., F. Yao, and D. Chen. 2021. “CSR investment decision and coordination strategy for closed-loop supply chain with two competing retailers.” J. Cleaner Prod. 310 (Aug): 127378. https://doi.org/10.1016/j.jclepro.2021.127378.
Liu, Y., D. Cai, C. Guo, and H. Huang. 2020. “Evolutionary game of government subsidy strategy for prefabricated buildings based on prospect theory.” Math. Problems Eng. 2020 (1): 8863563. https://doi.org/10.1155/2020/8863563.
Liu, Y., B.-T. Quan, Q. Xu, and J. Y.-L. Forrest. 2019. “Corporate social responsibility and decision analysis in a supply chain through government subsidy.” J. Cleaner Prod. 208 (Jan): 436–447. https://doi.org/10.1016/j.jclepro.2018.10.121.
Liu, Z., T. D. Anderson, and J. M. Cruz. 2012. “Consumer environmental awareness and competition in two-stage supply chains.” Eur. J. Oper. Res. 218 (3): 602–613. https://doi.org/10.1016/j.ejor.2011.11.027.
Lu, W., W. M. W. Lee, F. Xue, and J. Xu. 2021. “Revisiting the effects of prefabrication on construction waste minimization: A quantitative study using bigger data.” Resour. Conserv. Recycl. 170 (Jul): 105579. https://doi.org/10.1016/j.resconrec.2021.105579.
Lu, W., and V. W. Y. Tam. 2013. “Construction waste management policies and their effectiveness in Hong Kong: A longitudinal review.” Renewable Sustainable Energy Rev. 23 (Jul): 214–223. https://doi.org/10.1016/j.rser.2013.03.007.
Lu, W., M. Ye, R. Flanagan, and K. Ye. 2016. “Corporate social responsibility disclosures in international construction business: Trends and prospects.” J. Constr. Eng. Manage. 142 (1): 04015053. https://doi.org/10.1061/(ASCE)CO.1943-7862.0001034.
Lu, W., and H. Yuan. 2013. “Investigating waste reduction potential in the upstream processes of offshore prefabrication construction.” Renewable Sustainable Energy Rev. 28 (Dec): 804–811. https://doi.org/10.1016/j.rser.2013.08.048.
Luo, L., G. Qiping Shen, G. Xu, Y. Liu, and Y. Wang. 2019. “Stakeholder-associated supply chain risks and their interactions in a prefabricated building project in Hong Kong.” J. Manage. Eng. 35 (2): 05018015. https://doi.org/10.1061/(ASCE)ME.1943-5479.0000675.
Luo, L., X. Wu, J. Hong, and G. Wu. 2022. “Fuzzy cognitive map-enabled approach for investigating the relationship between influencing factors and prefabricated building cost considering dynamic interactions.” J. Constr. Eng. Manage. 148 (9): 04022081. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002336.
Mao, C., Q. Shen, L. Shen, and L. Tang. 2013. “Comparative study of greenhouse gas emissions between off-site prefabrication and conventional construction methods: Two case studies of residential projects.” Energy Build. 66 (Nov): 165–176. https://doi.org/10.1016/j.enbuild.2013.07.033.
Pazoki, M., and G. Zaccour. 2019. “Extended producer responsibility: Regulation design and responsibility sharing policies for a supply chain.” J. Cleaner Prod. 236 (Nov): 117516. https://doi.org/10.1016/j.jclepro.2019.06.347.
Pouikli, K. 2020. “Concretising the role of extended producer responsibility in European Union waste law and policy through the lens of the circular economy.” ERA Forum 20 (4): 491–508. https://doi.org/10.1007/s12027-020-00596-9.
Sohrabi, M. K., and H. Azgomi. 2020. “A survey on the combined use of optimization methods and game theory.” Arch. Comput. Method. Eng. 27 (1): 59–80. https://doi.org/10.1007/s11831-018-9300-5.
Tam, V. W. Y., C. M. Tam, S. X. Zeng, and W. C. Y. Ng. 2007. “Towards adoption of prefabrication in construction.” Build. Environ. 42 (10): 3642–3654. https://doi.org/10.1016/j.buildenv.2006.10.003.
Wang, B., L. Geng, P. Dang, and L. Zhang. 2022a. “Developing a framework for dynamic organizational resilience analysis in prefabricated construction projects: A project life cycle perspective.” J. Constr. Eng. Manage. 148 (10): 04022110. https://doi.org/10.1061/(ASCE)CO.1943-7862.0002381.
Wang, D.-Y., and X. Wang. 2023. “Supply chain consequences of government subsidies for promoting prefabricated construction and emissions abatement.” J. Manage. Eng. 39 (5): 04023029. https://doi.org/10.1061/JMENEA.MEENG-5285.
Wang, J., and W. Zhu. 2023. “Analyzing the development of competition and cooperation among ocean carriers considering the impact of carbon tax policy.” Transp. Res. Part E: Logist. Transp. Rev. 175 (Jul): 103157. https://doi.org/10.1016/j.tre.2023.103157.
Wang, W., S. Hao, W. He, and M. A. Mohamed. 2022b. “Carbon emission reduction decisions in construction supply chain based on differential game with government subsidies.” Build. Environ. 222 (Aug): 109149. https://doi.org/10.1016/j.buildenv.2022.109149.
Wang, W., S. Zhang, L. Zhang, and Q. Liu. 2020. “Government subsidy policies and corporate social responsibility.” IEEE Access 8 (Jun): 112814–112826. https://doi.org/10.1109/ACCESS.2020.3002794.
Xu, J., W. Lu, M. Ye, C. Webster, and F. Xue. 2020. “An anatomy of waste generation flows in construction projects using passive bigger data.” Waste Manage. 106 (Apr): 162–172. https://doi.org/10.1016/j.wasman.2020.03.024.
Xu, J., M. Ye, W. Lu, Z. Bao, and C. Webster. 2021. “A four-quadrant conceptual framework for analyzing extended producer responsibility in offshore prefabrication construction.” J. Cleaner Prod. 282 (Feb): 124540. https://doi.org/10.1016/j.jclepro.2020.124540.
Xue, H., Z. Wu, Z. Sun, and S. Jiao. 2021. “Effects of policy on developer’s implementation of off-site construction: The mediating role of the market environment.” Energy Policy 155 (Aug): 112342. https://doi.org/10.1016/j.enpol.2021.112342.
Xue, M., and J. Zhang. 2018. “Impacts of heterogeneous environment awareness and power structure on green supply chain.” RAIRO Oper. Res. 52 (1): 143–157. https://doi.org/10.1051/ro/2018005.
Yang, D., D. Song, and C. Li. 2022. “Environmental responsibility decisions of a supply chain under different channel leaderships.” Environ. Technol. Innovation 26 (May): 102212. https://doi.org/10.1016/j.eti.2021.102212.
Zhang, H., and L. Yu. 2021. “Resilience-cost tradeoff supply chain planning for the prefabricated construction project.” J. Civ. Eng. Manage. 27 (1): 45–59. https://doi.org/10.3846/jcem.2021.14114.
Zhang, W., K. Kang, and R. Y. Zhong. 2021a. “A cost evaluation model for IoT-enabled prefabricated construction supply chain management.” Ind. Manage. Data Syst. 121 (12): 2738–2759. https://doi.org/10.1108/IMDS-12-2020-0735.
Zhang, X.-M., Q.-W. Li, Z. Liu, and C.-T. Chang. 2021b. “Optimal pricing and remanufacturing mode in a closed-loop supply chain of WEEE under government fund policy.” Comput. Ind. Eng. 151 (Jan): 106951. https://doi.org/10.1016/j.cie.2020.106951.
Zhang, Y., Y. Liu, R. Yu, J. Zuo, and N. Dong. 2023. “Managing the high capital cost of prefabricated construction through stakeholder collaboration: A two-mode network analysis.” Eng. Constr. Archit. Manage. https://doi.org/10.1108/ECAM-04-2023-0392.
Information & Authors
Information
Published In
Journal of Construction Engineering and Management
Volume 150 • Issue 11 • November 2024
Copyright
© 2024 American Society of Civil Engineers.
History
Received: Jan 11, 2024
Accepted: Jun 11, 2024
Published online: Sep 13, 2024
Published in print: Nov 1, 2024
Discussion open until: Feb 13, 2025
Authors
Metrics & Citations
Metrics
Citations
Download citation
If you have the appropriate software installed, you can download article citation data to the citation manager of your choice. Simply select your manager software from the list below and click Download.