A lot of construction sustainability research focuses on the building level — is this individual project greener than a traditional one? That is important, but not enough. This paper asks a bigger question: does modular construction actually improve urban air quality at the city scale?
The study uses Difference-in-Difference (DID) and OLS methods to evaluate the impact of modular construction policies in Hong Kong and Singapore on five air pollution indicators: greenhouse gases, nitrogen dioxide, ozone, particulate matter, and sulphur dioxide.
What the research found
The results are encouraging but realistic. Modular construction is more sustainable than conventional building methods, but its overall effect on citywide air pollution is still limited.
The modular construction policies had a positive effect on sulphur dioxide (SO2) emissions in both cities, and a negative effect on nitrogen dioxide (NO2) and particulate matter (PM10) emissions. Meanwhile, greenhouse gases (GHG) and ozone (O3) varied between the two cities.
In Hong Kong specifically, the policy had a statistically significant impact on reducing PM10 concentration — a meaningful result for a dense urban environment where construction dust is a major air quality concern.
A good building method does not automatically create a major citywide environmental improvement unless adoption is broad enough. Modular construction policies have not yet been applied at sufficient scale, and construction projects take years to complete. Within the first few years of a new policy, only a small number of modular projects are finished — not enough to shift citywide air quality significantly.
Five indicators, not one
One of the strengths of this study is that it examines five different pollution measures rather than relying on a single summary number:
- Greenhouse gases — varied between Hong Kong and Singapore
- Nitrogen dioxide — modular construction had a weak reduction effect
- Ozone — policy impact was not significant
- Particulate matter (PM10) — significant reduction in Hong Kong
- Sulphur dioxide — the most noticeable policy impact of the five indicators
Urban pollution is multi-dimensional, and different policies affect different pollutants in different ways. This is why the paper is valuable — it avoids overselling modular construction and instead shows where it helps and where the effect is still small.
Why Hong Kong and Singapore are useful cases
Hong Kong and Singapore are both dense, highly urbanised environments where construction policy matters a great deal. They have different policy approaches but similar pressures around land use, density, and environmental performance, making them ideal for studying the real-world impact of modular construction.
For planners and policymakers, this is a useful lesson: the environmental value of modular construction cannot be judged only by design efficiency. It has to be evaluated in the context of adoption, regulation, and citywide conditions.
Who should pay attention
| Audience | What this means for you |
|---|---|
| Policymakers | Modular construction policies need broader adoption and stronger incentives before they can deliver measurable citywide air quality improvements |
| Developers | Modular methods are genuinely greener at the project level — but don't overclaim the citywide environmental benefit in marketing or ESG reporting |
| ESG analysts | Assess modular construction as part of a broader sustainability system, not a standalone solution — the scale of adoption matters as much as the method |
| Urban planners | Integrate modular construction with wider urban sustainability strategy for maximum impact — it works best as one lever among many |
The bigger picture
Modular construction is promising, but it should not be treated as a magic bullet. It can improve sustainability. It can support cleaner construction practices. But when we zoom out to the city scale, the environmental benefit is more limited than people often assume.
That does not make it unimportant — it just means we need more realistic expectations. If we want modular construction to have a larger impact, we probably need broader policy adoption, stronger incentives, and integration with wider urban sustainability strategy.
Sustainable construction is important, but it works best when it is part of a broader system of change. That is the real lesson here.
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Sherry Xu's research and books cover sustainability, AI, and investment strategy in the built environment.