A System Dynamics Model of Sustainable Construction for High rise Residential Projects in Developing Countries: Case of Indonesia

2.1. Sustainable Construction

As a subset of sustainable development, sustainable construction provides an ethical and practical response to resource consumption and environmental impact issues. The International Council for Research and Innovation in Building Construction (CIB) defined sustainable construction as “creating and operating a healthy built environment based on resource efficiency and ecological design”. This term directly addresses the importance of balancing social, economic, and ecological dimensions of development. The issue of resource-conscious design is central to sustainable construction, which aims to minimize natural resource consumption and the resulting environmental impact while maintaining the project’s economic performance. With respect to material efficiency, closing material loops and eliminating waste are key sustainability objectives. A closed-loop refers to a process of keeping materials in productive use by reducing, reusing, and recycling materials [6].

To address the issue and provide a guideline for the implementation, the CIB formulated Principles of Sustainable Construction, which encompasses the project’s life cycle. It consists of reducing resource consumption, reusing resources, using recyclable resources, protecting nature, eliminating toxicity, and applying life cycle costing. These principles are essential for designing suitable methods and policies to improve sustainable construction. It also emphasizes the use of life cycle cost for an economic approach instead of investment cost as the benefits of adopting sustainability are generated throughout the project life cycle [6].

2.2. Lean Construction

Sustainable construction is strongly correlated with production process and consumption. It is directly associated with the efficiency of transforming natural resources into social needs [7]. From this perspective, strategies are dedicated to improving industrial processes. In line with the objective, Koskela proposed lean construction philosophy to reduce all types of waste in production, time, and effort, resulting in the maximum value of resources. To implement the strategy, eleven principles of lean construction were identified. It includes reduction of non-value adding activities, increased output value, variability and cycle time reduction, steps minimization, as well as continuous control and improvement of the whole process [8]. Even though lean construction and sustainability were developed separately, it is evident that the strategies and practices of lean construction expressed in the principles have demonstrated the ability to generate a positive impact on social, economic, and environmental dimensions of project sustainability.

There are various approaches that implement lean construction principles, such as Building Information Modelling (BIM), prefabricated (precast) construction, Quality Management, and Just in Time Delivery [7]. This study considered quality standards, BIM, and precast construction methods as influencing factors since those practices have been widely implemented throughout the projects. Those sustainability methods are briefly discussed hereafter.

Quality management represents one of the Sustainable Construction Principles. It is an important tool for incorporating sustainability requirements into product development. Quality management is a philosophy that consists of values such as customer focus and continuous improvement, practices, which are reflected in a quality standard and code. In this respect, sustainability requirements are regarded as customers’ needs [9]. There are three aspects of quality: technical, environmental, and social. In order to ensure that the construction process can achieve sustainability goals, all aspects of quality requirements should be considered in the design process. Hence, integrating quality into sustainability performance can lead to a more sustainable and cost-efficient construction project while meeting all project goals [10]. Based on its important role, the quality standard was considered as an influencing factor of sustainability in this study.

BIM is a digital-based system that offers many benefits in building design, construction, and operation, including greater collaboration and better communication, reduced lifecycle costs and project delivery, and increased profitability and return on investment [11]. One of high-performance buildings’ attributes is their reliance on significant additional modelling, additional specification requirements, and the need to track aspects of the construction process such as quantities of recycled materials, emissions, and waste production. BIM-based technologies are also advantageous in delivering additional model and design information from the available data and developing a more sustainable strategy based on material and energy efficiency. The abilities of BIM to improve design quality by eliminating conflicts and reducing rework, minimizing errors, improving productivity, and therefore optimizing costs directly contribute to the transformation of the project towards sustainable construction [12].

Precast construction was defined as a manufacturing process generally taking place at a specialized facility in which various materials are joined to deliver the final construction element. The primary advantages of this approach are [13]:

• Economies of scale in mass production
• Improved construction efficiency
• Improved quality in construction site
• Reduction in costs and wastes
• Improvement in construction workers’ safety

Precast construction for modular buildings, with its integrated design, manufacturing, and construction process, has been advantageous in several major areas of construction projects; thus, it is a potential method to improve sustainability in construction [14].

2.3. Sustainable Materials

Among such sustainable construction practices, sustainable material selection plays a vital role that directly impacts building sustainability. Conversely, inappropriate materials adversely affect the environmental, economic, and social aspects of buildings. Selecting suitable construction materials may reduce carbon emissions by up to 30% [15]. Alserai et al. studied sustainable construction through the creation of sustainable concrete. To deal with the global warming, some efforts are being made to reduce the use of Portland cement in concrete. These include the use of auxiliary cementing materials such as fly ash and granulated blast furnace slag [16]. In this study, concrete was selected as an influencing factor of sustainable construction for some reasons. First, concrete is a critical element in the construction industry, which offers many benefits. Second, concrete consumes a huge amount of energy and materials in cement and steel production. Third, of the total greenhouse gas emission globally, 27% comes from cement, and 30% of it comes from steel [17].

2.4. Regulation as a Sustainability Driver

Energy and material consumption in developing countries has been increasing rapidly due to recent economic growth. This trend has led to serious environmental problems such as resource depletion, increasing energy demand, carbon emission, and global warming. In order to address the issue, energy regulation is one of the most frequently used instruments for improving energy efficiency in building systems. There are two main types of energy regulation: standard and code. The law sets standards for the design and construction of buildings to ensure the community’s health and safety and energy conservation. It plays a vital role in setting energy-efficient design and construction requirements. Governments adopt and enforce energy codes for their jurisdictions, while energy standards describe how buildings should be constructed to save energy [18]. Measures are classified as mandatory and voluntary. Most developed countries have been imposing mandatory standards while developing countries still implement voluntary-based standards. It is imperative to note that the effectiveness of regulations depends on the enforcement and monitoring rather than the clauses themselves. Gan et al. reported that China is still struggling with regulation enforcement, despite the progress in sustainability improvement [19]. This finding was supported by a study conducted in Indonesia, which found that the environmental regulations have not been effective in reducing energy consumption due to the limitation in their implementation and lack of consistent monitoring [20].

2.5. Indicators of Sustainable Construction

Sustainable construction indicators, as shown in Table 1 were collected from a literature review based on the project owner’s perspectives, which were further selected based on the relative importance of high-rise residential construction projects to represent the three dimensions of sustainable construction [21].

The consumption of construction materials has been increasing exponentially in the past 50 years globally and is still growing rapidly. Despite its important role in economic growth, material production and processing have significant negative impacts on the environment. If the demand is fulfilled with unacceptable environmental stress, the solution is material efficiency. Material efficiency means the efficient use of natural materials in the production process with fewer resources and environmental impacts. Carbon emission and global warming are among the biggest problems that material efficiency directly affects [21]. Hence it was selected as the environmental sustainability indicator. With respect to energy consumption, the construction industry is responsible for about 40% of the energy consumption and 30% of the carbon emission worldwide, mainly during building operations. Energy efficiency is a strategy to use less energy in processing products or services. It is an effective instrument to reduce carbon emissions and has been a central focus of many national energy policy targets. It impacts resource and environment protection, which leads to life cycle cost savings [22]. In this regard, material and energy efficiency were considered as a sustainability indicator.

The construction sector is among the industries with the highest accident rates. It has approximately as many as six times more fatalities per hour of work than the manufacturing industry. In spite of many initiatives led by the government and construction industry to improve health and safety performance, workplace accidents remain a social and economic problem [23]. The protection of workers against diseases and injuries arising out of employment is a fundamental element of social justice and constitutes a social and health dimension of the principle of sustainable development. Therefore, the construction process should include health, safety, and the environment as design and production parameters, thus integrating occupational and environmental health and safety in the design phase to achieve sustainable construction [24].

High-rise residential settlement is a long-lasting built space in which early decisions associated with the project have long-term consequences. Unfortunately, in terms of project cost, most investors consider the initial cost in the design phase and ignore the operation and maintenance cost impacted by the decision made in the early stage of development, resulting in higher operating costs. In a commercial building, energy consumption cost has been considered a key component as this is a major annual expenditure. To achieve sustainable construction, cost-effectiveness along the building life span plays a crucial role. LCC is a technique that generates a comparative cost assessment over a specific time, which comprises initial costs and future operation costs such as energy, utilities, maintenance, and irregular expenses. The integration of LCC as an approach to meet the economic aspect of sustainability in the development process can generate a solution for project feasibility. It provides an early estimate of the operational saving potential to make the project more efficient and feasible in the long run [25].

3.1. Problem Definition

This step is critical in system dynamics modelling. It makes the modelling process purposeful, and a clear purpose will result in a successful modelling process [26]. The definition is important in determining the model boundary and selecting the significant variables. The articulation is formulated based on a reference model representing the changes of specific variables over time and expresses the problems to be investigated. In this study, the problem related to an urban residential project is a large amount of material and energy consumption and waste generation, which strongly impact the environment. The second problem is how to conserve the environment while fulfilling the economic objective of the project. These issues will be explored through the dynamic behaviour of the system.

3.2. Identification of Influencing Factors

Based on the defined problem, an initial list of significant variables was identified through a comprehensive review of previous reports. It comprised of environmental impacts (material and energy consumption, carbon emission, and construction waste), organizational capabilities, sustainability indicators (health and safety, construction duration, resources efficiency, LCC), lean construction (standard quality, BIM, precast method), sustainable materials and the regulations.

3.3. Survey Design

A questionnaire was designed using the influencing factors obtained from the literature review to collect qualitative and quantitative data from the experts' perspectives on the influencing factors. Part 1 of the questionnaire described the purpose of this study and the demographic data of responders. In the second part, responders were requested to select the factors obtained from literature using a Likert scale, ranging from strongly disagree to strongly agree. The amount of resources consumptions, as well as waste production, were collected as quantitative data.

3.4. Data Collection

Thirty high-rise residential projects developed between 2015 and 2019 in Surabaya and Jakarta were selected using the purposive random sampling method, of which 30 experts from the projects joined the survey as responders, including designers, developers, and property management consultants. From the demographic data, it was revealed that 40% out of the total responders were key managers, and 57% were undergraduates. 38% of the responders had more than 30 years of experience in condominium projects. All projects had been implementing a certain level of sustainable construction practices; however, only 27% of the projects had adopted green building rating tools.

3.5. Survey Results

Based on the qualitative survey, the influencing variables of sustainable construction were identified as follows:

1. Environmental impacts: material consumption, energy consumption, waste.

2. Sustainable construction methods: BIM, quality standard, precast construction, material selection.

3. Sustainable construction indicators: material and energy efficiency (environment), health and safety (social), life cycle cost (economic).

Since construction duration and carbon emission have insignificant value, the two factors were excluded as the research variables.

4.1. Sub System Diagram

The system consisted of several subsystems, where each subsystem was controlled by some variables from specific criteria (Fig. 1). For example, the application of lean construction resulted in additional investment costs and reduced operating costs. Finally, the LCC will influence the adoption of lean construction to reduce the impacts and create a close loop. The significant variables and the interaction among them are reflected in a CLD.

4.2. Model Boundary Chart

Based on the variables obtained from the survey, a list of model boundary chart was established. It provided the model’s scope by classifying the variables into exogenous and endogenous variables. The proposed model excluded the impact in the form of carbon emission, and the role of project duration as the respondents perceived it as not necessary. The chart is described in (Table 2).

4.3. Causal Loop Diagram (CLD)

Based on the boundary chart, a dynamic hypothesis of sustainable construction for high-rise residential projects was defined and represented by a CLD, describing the interrelationship of the variables which created the system behaviour (Fig. 2).

The system's structure allowed a feedback mechanism and generated subsystems with different polarities, where the positive sign reflects a reinforcement, and the negative sign is a balance. Nine loops were identified, where six loops (B1, B2, B3, B4, B5, and B6) are positive, and the remaining are negative (R1, R2, and R3).

To explain the subsystem mechanism, consider negative loop B1 as an example. The increase in energy consumption resulting from high-rise residential development requires the legislation of environmental regulation to control the negative impact on the environment. The implementation of regulations coerced the organizations to impose a quality standard to minimize defects and repeated work. This standard is expected to reduce the rate of energy consumption. Similar patterns and logic are also found in the rest of the negative feedback loops.

Conversely, some loops were reinforcing. Take loop R1, for instance. High-rise development growth requires larger amounts of construction materials that need to be controlled by the government through regulations to minimize resource depletion. Implementing regulation required the adoption of sustainable practices such as precast construction. The application of precast construction will reduce the investment cost because of efficient material use and better control of components produced in the factories. The decrease in the investment cost will reduce the LCC, which positively impacts the affordability of the project to meet housing demand. A similar pattern is also seen in loops R2 and R3.

4.4. Stock Flow Diagram (SFD)

Before conducting further analysis, all qualitative data must be converted into quantitative numbers to make it compatible with the Ventura simulation software analysis process. The next step is variable classification. When the definition has been established, and the boundaries are clear, all units of the variables in the causal loop diagram are then classified as rate and level. If the variable unit is rate or discharge, or velocity, the variable is classified as rate or flow. Conversely, if the variable unit accumulates and changes over time, the variable can be classified as level or stock. This classification process is mandatory to develop the stock and flow diagram that would represent the real system. The base model of sustainable construction is shown in Figs. (3 and 4). Variables such as material consumption, energy consumption, construction waste, material efficiency, energy efficiency, health and safety performance, and life cycle cost are categorized as levels, while material increase, material decrease, and the rests with similar characteristics are categorized as rate.

4.5. Verification and Validation of the Model

Before conducting the model simulation, it is important to verify the model and check the model's validity. Verification is the process of ensuring whether a simulation computer program works as intended, while model validation is a tool to ensure the accuracy of the conceptual model to represent the actual environmental problem being studied [31]. Verification is a test to detect and report any error in the model. If there is no error, then the model is working in conformance with the system logic. The verification result of the model showed that there was no error, and the model development met the validated requirement. A validity test is an instrument to check the possibilities of two types of statistical errors. If Type I error (E2) occurs, a hypothesis is true but falsely rejected. If a Type II error (E2) occurs, a false hypothesis is falsely accepted. E1 is identified through statistical mean comparison, while E2 can be detected through amplitude comparison. Barlas defined that a model is valid when E1 value <5% and E2 value < 30% [37]. In this paper, the validity test result of energy consumption revealed that E1 is 3% and E2 is 3%, so the model was valid, as shown in Table 3 and Fig. (5). Similar results were also seen in material consumption and waste production variables. The tests confirmed that there were no data errors, and the model was valid.

5.1. Simulation Result of Energy Consumption

In this step, the impacts of current regulation and construction methods to reduce environmental depletion were examined. The simulation results demonstrated that the energy consumption in the selected projects increased up to 50% on average, despite the implementation of the regulations and sustainable construction practices, i.e., quality standards, BIM, precast, and sustainable material use (Fig. 6). Similar patterns are also seen in material consumption and waste generation.

5.2. Simulation Result of Energy Efficiency

Despite the increase in energy consumption, the simulation of energy efficiency as a sustainable construction indicator showed a positive outcome, where energy efficiency increased from 8% during the year 2015 to 2019 (Fig. 7). However, the results indicated that efficiency fluctuated from time to time, which means that the current regulations and practices have to be improved. A similar trend is also shown in the material efficiency variable.

5.3. Simulation Result of LCC

The life cycle cost variable represents the total cost required during the project life cycle, including the initial cost and operational cost incurred by the implementation of the regulations and sustainable construction methods (Fig. 8). The result indicated that the impact of regulation and sustainability practices on the LCC is not significant, whereas the LCC still increased up to 12% due to the project growth.

6.1. Scenario 1

The implementation of current energy regulations in developing countries has not successfully reduced non-renewable energy consumption for several reasons explained previously [20, 32]. Some studies suggested the formulation of new energy use and energy intensity regulations in building codes to reduce energy consumption for new buildings [39]. Gaglia et al. proposed that the application of energy performance regulation can reduce energy consumption by 3.5 – 4% [40]. This structural scenario was developed to enhance the use of materials that can induce low energy, such as heat insulation in the design phase, solar cells, declining energy consumption, and improved energy performance within the whole project life cycle. There are many kinds of energy policies, such as building energy standards, building energy performance, and energy pricing [41]. The scenario was established by imposing energy performance regulations integrated with building construction permits to reduce energy consumption in a high-rise residential project (Fig. 9).

6.2. Scenario 2

This structural scenario was constructed through a tax incentives policy to promote sustainable construction by reducing the value-added tax of certain sustainable materials (Fig. 10). Tax incentives are government grants awarded to certain parties that offer a business costs reduction and greater potential return or fewer business risks to attract investors in specific sectors [29]. Syaifudin et al. reported that a fiscal instrument is a progressive government policy that directly impacts cost reduction and increases energy efficiency [39]. Moreover, subsidies and tax compensation have been widely applied in many developed countries and some developing countries to enhance sustainability practices, especially in reducing carbon and energy use [17]. These results were consistent with Olubunmi et al., who found that incentive is an important instrument for promoting green building [42].

6.3. Scenario 3

Scenario 3 was designed by combining the influence of energy performance regulation and tax incentive policy. It was expected that the mixed policies would generate better outcomes of energy savings compared to individual ones without sacrificing the economic objectives of the project [43]. The simulation results of the base model after applying the scenarios on energy consumption, energy efficiency, and life cycle cost are shown in Figs. (11-13), respectively. The time interval is a quarter year.