Assessing The Feasibility Of Environmental Sustainability Construction Essay

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1 Since the late 1980s, environmental sustainability in construction projects has become one of the major research topics. Sustainable construction is classically defined as the creation, innovation and responsible management of an environmentally friendly construction based on resource efficient and ecological principles (Tan 2010, p. 4). The idea of responsible construction management to the environment emerged while in 1994 the concept of sustainability was born at a tactical level in the building sector. A considerable number of contractors believe the creation, innovation and responsible management could mainly cause extra costs to projects. Therefore, in two last the decades, it has not been applied significantly. Nowadays, however, the endorsement of environmental performance is becoming more widespread amongst construction companies, inducing cost savings and consequently contributing to business competitiveness. Environmental performance can minimize negative effects of construction activities and maximize economic success. This essay will argue that innovation and technology may increase companies' competitiveness. This standpoint will be supported by opposite views of scholars and the evaluation of a case study for each viewpoint.

2 The major argument against sustainable economic feasibility is that the current level of corporate environmental protection activities often conflicts with the contractors' business objectives, particularly that of increasing economic success. In many cases environmental issues influence both costs and income of a company and therefore have an influence on the economic success of a contractor. Schaltegger and Synnestvedt (2002) explain every environmental protection activity will reduce economic success. Based on this study, Wagner and Schaltegger (2003 ??) also propose a phenomenological relationship between environmental protection activities and economic success. They argue that the sustainability performance would reduce economic success and the purpose of environmental regulation is to correct negative externalities, which would consequently load firms with additional costs. Professor Carmichael of the University of New South Wales (2009) states sustainability practices are seen as an added cost or more regulations to follow. Nowadays, the above-mentioned relation is called the "traditionalist view of neoclassical environmental economics" by Tan, Shen and Yao (2010).

3 In some countries, particularly developing countries, environmental performance would increase project costs. For example in Iran, recommendations exist to encourage contractors to invest in environmental protection. To contractors, however, environmental protection is not of the highest priority. As a consequence, investments in sustainability are almost non-existent. Moreover, the availability of cheap energy resources results in increasing numbers of gasoline-driven construction machinery. Therefore, in Iran it may not be feasible to achieve economic success following increased environmental performance, as contractors feel little incentive to perform sustainably. Technology to produce recycled materials as well as investments in environmentally friendly machinery and equipment are a necessity. Also, in some countries, primary raw materials are easily accessible, which causes contractors to obtain cheap primary raw materials instead of recycled materials. For instance in Hong Kong, 42% of the 16 500 tonnes solid waste disposed of daily at the three municipal waste landfill sites consist of construction and demolition (C&D) waste. About 80% of the C&D waste landfilled is inert (e.g. sand, bricks and concrete) material, which could be better reused for land reclamation (Environmental Protection Department, 1998 & 2000, cited by Poon, Yu & Ng, 2000, p. 158). Consequently, Hong Kong contractors are reluctant to implement on-site waste sorting as an environmental protection activity (Poon, Yu & Ng, 2000, p. 171).

4 The accessibility of low-priced primary raw materials compared to recycled materials in a number of developing countries is a barrier to environmentally sustainability performance by contractors who are naturally benefit oriented. In these circumstances, it is not feasible to expect of small and medium sized companies to increase their project costs because environmental protection generates no additional benefit. However, pre-occupation with today's business, and pre-occupation with a project costs savings, at the expense of the bigger and long-term picture may lead to the contractor's business failure, such as environmental calamities such as the occurrence of oil spills or hazardous substances in case of demolition contractors. As a result, continuing business based on the traditionalist view may generate profits in the short term, but without embracing sustainability, the long-term performance of a company is uncertain, due to a lack of environmental strategy. Therefore, preferring economic success to sustainability performance according to the traditionalist view is considered a weakness. However, Carmichael (2009) asserts environmental sustainability performance would be a positive opportunity for economic success of contractors under new conditions. Consequently, it would be feasible if the above-mentioned weaknesses were eliminated and some shifts in regulations and policies were achieved.

5 By contrast, sustainability could be an opportunity that can add value to the contractors and profitability to a business, independently of any moral, ethical or corporate social responsibility (CSR) concerns. In other words, the current level of corporate environmental protection economically sustainably practiced by a company has a beneficial effect on its own economic success. According to Tan (2010), improvement in sustainable performance contributes to business competitiveness. Properly designed environmental standards can trigger innovations that lower the total cost of a product or improve its value. Such innovations allow companies to use a range of inputs more productively - from raw materials to energy to labour - thus offsetting the costs of improving environmental impact and ending the stalemate. Ultimately, this enhanced resource productivity makes companies more competitive, not less. Tan (2010) acknowledges Porter & Van der Linde (1995) and Sinclair-Desgagné (1999) that improved sustainable performance is a potential source of competitive advantage leading to more efficient processes, improvements in productivity, lower costs of compliance and new market opportunities.

6 Regarding the latter point of view, a case study on a contractor of demolition works and recycling of construction and demolition waste in the Netherlands is provided. In 2007, the contractor decided to incorporate adequate environmental measures into the recycling process by investing in dust control equipment. Following this decision, the Dutch government immediately issued a ten-year environmental permit for the contractor's activities. While the initial investment of the equipment amounted to €25,000, the company increased its production volume from 14,980 tonnes of recycled aggregates in 2006 to 280,600 tonnes in 2009 (increase of 17.73%). Moreover, the gross margin of the activity increased from €14,980 in 2006 to €420,900 in 2009 (Janssen, 2010). In summarise, the study shows that economic success can be achieved by means of improved sustainable performance. Hence, high environmental performance can be economically feasible.

7 As a consequence of this argument, however, several problems arise. The comparative advantage and the economic success depend on a variety of factors such as the level of technological development, the owner and clients' willingness to pay for environmental protection, the kind of environmental regulations in a country, etc. The ability of innovation and developing new technologies would be more important for sustaining competitiveness than traditional competitive advantage factors (Porter & Van der Linde, 1995 as cited in Tan2010, p. 2). First of all, low accessibility of contractors to technology and machinery, e.g. in Iran, could be a substantial obstacle to benefit from environmental practice. Although the feasibility of environmental sustainability related to availability of new technology enables contractors to address many of the sustainability issues directly and reduce their own footprints, technology is not available to all companies. A significant number of small and medium sized companies may have obsolete and less environmentally friendly technology, which can be considered a weakness of this view. Furthermore, according to Porter & Van der Linde in their 1995 study, the benefit of the investment in environmental protection will be decreasing after the peak point due to the increasing investment in sustainable activities (Tan2010, p. 2).

8 Another problem caused by enhanced resource productivity is strongly related to innovation that may not be available easily, anytime and anywhere. Therefore, sustainable construction might also be dependent on innovation and having the in-house competencies and skills to adapt to future scenarios. As a result, it might not be approachable by considerable numbers of contractors particularly in developing countries. Accordingly, Schaltegger (2002) warns there are only a few studies on how to improve contractors' competitiveness by implementing sustainable construction practice. Furthermore, the effectiveness of the sustainable construction manners has been limited in practice, because cost, time and quality have been the determinants ensuring maximum benefits to the contractors who have profit-driven culture.

9 In conclusion, if it is accepted that economic factors and construction projects' cost play a significant role in project feasibility, then environmental sustainability may result in extra cost but could be feasible. This feasibility actually could be affected by the phenomenological relationship between sustainability performance and business competitiveness in the construction industry which may not be unique in developed and developing countries. In revisionist thought this performance not only results in project feasibility but also cause to efficient processes and new market opportunities. In advanced, it could be an opportunity to increase competitiveness and, therefore, benefits, which is more feasible in developed countries. Furthermore, it has been seen many times that environmental performance at least does not have a negative influence on a firm's financial and its economic success. What seems evident is that environmental protection activities would add extra cost and more regulations to be followed by contractors. Decreasing the cost of technology and innovation needed for environmental protection activities is difficult to accomplish, but this is of the highest importance to small and medium sized companies in developing countries.

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