Historically, the relationship between waste and gross domestic product (GDP) has shown a mirroring of trends, so as the GDP rises, the amount of waste produced increases with it.
When the recession hit in 2008, the amount of waste produced dropped too. Yet, as the UK has begun to recover from the recession, waste arisings have remained stubbornly low.
It is a significant issue, as the shrink in UK GDP in the last quarter by 0.5% came as a complete surprise to economists who expected a rise of around 0.3 to 0.5%. But while the Office for National Statistics put the concerning number down to the severe winter weather, the national press reported on fears of the country entering into a ‘double dip’ recession.
Therefore, are low waste arisings a signal of things to come for UK economic growth, in terms of predicting a ‘double dip’ or are we starting to see a decoupling of the two?
“It does seem to be a behaviour change which has been caused by the recession and is continuing to manifest itself”
“Specific waste streams are linked to GDP,” explains AEA technology knowledge leader for waste Adam Read. “For example, food waste – if a family is on a tight budget are they going to be throwing away half a salad or half a pizza? It is more likely that they begin to buy less food or make an effort to eat leftovers. It does seem to be a behaviour-change which has been caused by the recession and is continuing to manifest itself.
“As we move to the future, we will need to accept that we can still have economic growth and development, while looking at resource efficiency.”
For many in the industry, another quarter of shrinkage is not expected with many believing trade lost to the snow will now follow through and cause a recovery in this quarter. Many have expressed their frustration at the logistics of collecting and delivering waste, which were thwarted by ice and snow-covered roads. Meanwhile householders, who did not have waste collections for several weeks, gave up on recycling, instead putting all waste in one sack, as it continued to pile up.
Tolvik Consulting director Adrian Judge believes the recession had a greater impact on waste arisings than just through GDP. He says: “GDP had an indirect affect and by shifting the behavioural pattern, as to how people thought about waste. My sense is what will happen now going forward is, while GDP will continue to affect waste arisings, it will not be as structured as it might have been in the past – it will be more fluid. So if we see GDP rise, then waste arisings will most likely only modestly increase.”
Those affected most by the lowered waste arisings tend to be the landfill operators because not only is there less waste overall, the the landfill tax escalator is a significant driver to increase recycling rates.
Judge adds: “Before the recession there were certainly assumptions people made about the industry which were one-way bets, that recycling streams wouldn’t collapse. But they did, so now, businesses have to work in a more ‘intelligent’ way, thinking about how the marketplace is developing.”
Compliance 360 environmental director Phil Conran does not believe GDP and waste arisings are becoming disconnected. He suggests that prior to the last quarter’s GDP figures, as the economy grew, waste arisings did not necessarily match this growth.
Furthermore, consumers are buying differently, producing different packaging and therefore different tonnages of packaging.
He says: “Packaging in supermarkets does not look obviously different from years ago - cereal boxes are the same, as are tin cans. There is very little obvious sign that packaging waste is reducing through conscious effort but maybe it is just a behavioural thing and consumers are buying differently.
“I am not convinced we are seeing a consistent fall in waste against GDP. I think it will stabilise soon.”
Businesses and consumers across the UK will be waiting with baited breath to see if the same can be said about the UK economy.