An Activity-Based Costing decision model for life cycle assessment in green building projects

Carbon emissions are an increasingly important consideration in sustainable environmental development. In the green building industry, green construction cost controls and low‐carbon construction methods are considered to be the key barriers encountered. Based on Corporate Social Responsibility (CSR) policy, management of carbon emissions from green building projects contributes to the acquisition of accurate building cost information and to a reduction in the environmental impact of these projects. This study focuses on the CO2 emission costs and low‐carbon construction methods, and proposes a 0–1 mixed integer programming (0–1 MIP) decision model for integrated green building projects, using an Activity‐Based Cost (ABC) and life cycle assessment (LCA) approach. The major contributions of this study are as follows: (1) the integrated model can help construction company managers to more accurately understand how to allocate resources and funding for energy saving activities to each green building through appropriate cost drivers; (2) this model provides a pre‐construction decision‐making tool which will assist management in bidding on environmentally‐friendly construction projects; and (3) this study contributes to the innovation operation research (OR) literature, especially in regard to incorporating the life cycle assessment measurement into construction cost management by utilizing a mixed decision model for green building projects.