Construction industry performance measurement with carbon reduction

Managing carbon emissions without discouraging production improvement has positive environmental and economic implications in sustainable development. Effective performance measurement can support the improvement of production performance and the reduction of carbon emissions. However, current research generally neglects carbon emissions in performance measurement in the construction domain. This study aims to improve construction industry performance through developing non-parametric approaches for performance measurement and driving forces analysis. The Australian construction industry during the period 1990–2013 is employed as an example in this research. This study reviews the methods related to efficiency performance measurement and selects Data Envelopment Analysis (DEA) as the primary method to measure performance. Carbon emission performance in a total factor production framework is then measured based on the efficiency of carbon emissions using the DEA-based Malmquist index. Two productivity indicators are evaluated considering both construction growth and carbon reduction. Carbon productivity changes are assessed using the Log Mean Divisia index. Total factor productivity changes are assessed by applying a sequential Malmquist–Luenberger productivity index. A method called slacks-based DEA is established to assess eco-efficiency, which is an integrated indicator that simultaneously measures economic growth, resource conservation and environmental protection. Intertemporal and window benchmark technologies are respectively applied to construct DEA models for comparing the eco-efficiency results in temporal and spatial dimensions. Moreover, the evaluation of profitability performance, efficiency and effectiveness is implemented through a global relational two-stage DEA method. Finally, carbon reduction targets and opportunity costs are assessed using several DEA models in different production scenarios. To summarise all measurement results, although performance across the whole construction industry demonstrated a significant increase, its performance could be further improved over time. Performance gaps among the regional construction sectors became apparent over the research years in Australia, due to different rates of performance development. Additionally, carbon emissions could be further abated so as to achieve low-carbon growth in the Australian construction industry. Learning techniques from the benchmark sectors including the ACT, the NT and WA, would be beneficial for performance development across the whole industry. Technological innovation and active application of advanced technologies have promoted and could further promote performance. Pure technical efficiency, which has hindered performance enhancement, must be further improved. Therefore, this research contributes to policy implications and possible measures for both carbon reduction and sustainable development in the Australian construction industry through investigating the driving forces, carbon reduction objectives, and efficiency performance at key time points. The approaches developed in this research are generic and could assist construction industries and organisations to measure, compare and evaluate performance, and then to identify the driving forces in order to improve performance. The developed approaches promote the progress in modelling performance measurement especially in relation to reducing undesirable outputs, such as building original DEA models, achieving new research targets by utilising current DEA techniques, integrating advanced benchmark technologies and decomposition methods.