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The numbers game fails to add up

Lies and statistics 2000

Hands up those of you who last year predicted oil at sub-$40 a barrel, a drop in the FTSE of 9% in January, gas and wholesale electricity prices at an all-time low, commodity prices close to the 2008 recession low point, and the Government systematically withdrawing most renewable energy support tariffs.

I would wager, indeed forecast, that not many of you would have got all or even more than one of these things correct, let alone what these same things might do five or 10 years into the future. But then again I could be wrong.

Andy Olie 2000

This is, of course, because forecasting anything in life is extremely difficult. So how do we avoid coming to the conclusion that ‘nobody knows anything’ and that the ‘past is no indication of the future’, leaving us in a position where we struggle to plan for the future at all?

Entrepreneur Luke Johnson, writing recently in the business section of the Sunday Times, talks about how “one should never place unquestioning reliance on plans, forecasts and predictions – especially if they are prepared by gurus”.

He quoted US statistician Nate Silver on the “deluge of data now available means [that] people perceive patterns where none exists and that apparently clever models can do more harm than good”.

Sounds familiar? The waste sector is a broad church that fundamentally relies on delivering solutions to other sectors and markets and, as these change, so the outcomes for the waste sector change.

In that context it is probably understandable that many leaders in our sector ask for further legislative measures and fiscal interventions which have, and would, give some degree of certainty to the sector and help to drive behaviours.

This, in turn, leads the sector as a whole to grow and prosper – after all, it has worked so far.

But the world has changed, and asking for further interventions will almost certainly be pointless, which is not surprising.

Businesses have been lobbying for some time for lower taxation, less legislation, cheaper power and less intervention to ensure they are globally cost competitive. Local authorities struggle to balance the books with huge demands on their dwindling budgets, and some are now consciously not setting high recycling targets as a result.

Against a backdrop of many global oil and commodity-based businesses being on their knees, our leaders could be seen to be even more out of step.

So how do we start to overcome this problem of a changed status quo? Well, I am not suggesting the solution is to drive legislation through at the EU level to solve the intransigence at a UK – or more specifically English – level. It does not solve the fundamentals of demand and supply and the global nature of the economy.

Legislative ‘push or pulls’ to drive a circular economy (CE) creates a unique EU picture that nobody else is driven to follow. To see how that looks, we only have to observe how difficult it has been to agree a consensus on reducing CO2 emissions across the globe, and the resulting commitment is arguably still insufficient.

And, of course, the whole CE package from Europe could be watered down through lobbying by member states, if indeed the UK stays in the EU or negotiates an opt out ‘drawbridge’ from the things it doesn’t like – but there I go forecasting again.

What we should be doing is looking at how we drive behaviours and solutions based on sustainability in the widest terms, and in an environment where subsidies and new legislation are the not the drivers.

As a start, how about we focus on the fact that, as an industry, waste does not seem to be able to agree the range of forecasts that might be applicable to not only energy-from-waste infrastructure, but the other consequences of these forecasts? These include total arisings and the delivery of more recycling infrastructure at a time when demand and prices are suppressed and operators are closing rather than opening new processing plants.

To solve and frame this in a more structured way, how about we expand Defra’s Digest of Waste and Resource Statistics to include a degree of forecasting that gives different ranges of outcome depending on the assumptions made on market drivers? And while we are at it, let’s ensure that this is a balanced projection that brings together the varying opinions of the sector and is not written by a single consultancy.

To do this, and to deal with Johnson’s point, how about it being driven by a group of practitioners and consultants, marshalled by an independent chair (all giving their data and time pro-bono)?

After all, we don’t want our future to be determined by a single guru with a complex spreadsheet, do we?

Andy Olie is director at Monksleigh

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