What are you hoping to achieve with that waste policy?

Waste is rife with government policies. All well-intentioned (we hope), but rarely clear how they work. So lets think about this a little.

If your objective is:

• Reduce total tonnes to landfill, then your policies need to focus on dense materials disposed of in bulk. That is generally construction and demolition waste. It is also not usually especially harmful to the environment. It's also food waste, which is harmful to the environment.
• Reduce greenhouse gas (methane) emissions, then your policies need to focus on food waste, paper and cardboard, garden waste and timber.
• Protect the marine environment, then your policies need to focus on plastics, and especially plastic bags.
• Preserve economic resilience in scarce materials, then your policies need to focus on rare earths in electronic waste.
• Reduce immediate environmental harm, then your policies need to to focus on household hazardous wastes, potentially even food waste (leachate pollution).

We'd like to do all of these things at once. That is not always possible.

The policy levers to drive reducing total tonnes to landfill will invariably run against paper and cardboard (they are light), plastics (they are light), scarce material recovery (they are insignificant in the total tonnes) and reducing immediate harm (the weight of toxic materials is very small).

Operations do respond to policy levers. They respond to solve problems and to create new problems. Recovering steel from e-waste to reduce tonnes can destroy the chance to recover rare earths Trying to fix a new problem with another set of levers makes for bad policy. It creates confusion and counter-productive efforts.

The ideal is for a policy maker to design an elegant solution that achieve as many of the objectives as possible. Key words are "design" and "elegant". Ideally that policy wouldn't need much policy.

And what are we currently doing? Right now, the dominant push is to reduce total tonnes to landfill. This is what is reported on, this is where the effort is.

Is that what you were hoping to achieve?

Government in waste - help or hindrance?

Whenever there is talk of waste and recycling, there is talk of how the Government can assist. Should it?

On the plus side, Government obviously has loads of cash, and can make all sorts of laws to reinforce the business model of a recycling business. It can mandate recycling of particular materials, put in place landfill bans, impose landfill taxes and subsidise recycling business.

But should it? Perhaps, under certain circumstances, however this is going to naturally lead to a certain type of industry. It will favour the large and established over the small and nimble. It will favour those who control the market over those who would disrupt it. It will favour the bureaucratic over the free-wheeling. It will favour monumental infrastructure over human scale business model innovations.

Government will take a risk averse approach and channel money to organisations that, whilst they might lead to significant improvement, will not lead to great improvements. Organisations that are exciting and disruptive, that might make massive changes, won't attract support because they could equally fail hugely. Government will look to minimise downside, not maximise upside.

Be this as it may, I would argue that the question is posed the wrong way. Instead, the better question is "should waste and recycling businesses seek Government support?" And I suggest that the answer is resoundingly "No!"

Chasing Government support takes a lot of effort. More importantly, the things you have to do to your business model to meet Government funding requirements will also cripple your business. You will start as a nimble organisation, reliant on none, and end up gummed up with a bureaucracy that you never believed possible. And certainly never needed.

In this field that is ripe for disruption, ready for upstarts, primed for somebody to change everything, you don't need to be wasting your time convincing the Government. Use that time to surround yourself with investors who get what you are trying to do and will help you get there.

Incineration and the future of waste

Today I was at a seminar on "waste to energy", otherwise known as incineration.

It was quite surreal. Listening to great speakers from the US and UK (and they were excellent - thank you) on video-conference, in a packed room (had to be well over one hundred there), I couldn't help the feeling that I was watching the justification of mainframe computing in a personal computer era.

You see, the presentations were all about how incineration is fine environmentally etc. I get that environmental and health factors concern people. It's easy to get frightened of the "pollution factory" down the road, especially when you can't see the pollution. But I don't think this is the problem with incineration.

For mine, the problem with incineration centres on its philosophy of bulking everything into a furnace and then cleaning up the back end. In doing this, you pretty much have to cater for the worst case.This is expensive. And the best fuel (plastic, timber, cardboard) is so easily recycled through much cheaper avenues. You are desperately vulnerable.

So the problem becomes how do you finance these things? Especially now in the post GFC world where banks are risk averse (!?). Incinerators are immense capital investments (several hundred million dollars just to build) that require waste feed secured over decades. And that, to me, is why incineration will fail.

It is no accident that incinerators are only built when underpinned by government. This might be finance, subsidies or waste feed,or more likely all of the above. Absent one, the business case gets very dicey. Large mixed waste incinerators are not built commercially.

Commercial incinerators do exist, but they are smaller and focused on a specific waste stream. Why? Because it requires less pollution control, feedstock is more secure and the business case is stronger.

But it comes back to this. Why would you invest hundreds of millions of dollars on technology that is forever at risk of new pollution control standards, when you can invest a few million and make a highly focused plant hum. A portfolio of these little plants dealing with discrete parts of the waste stream - now there's a business I'd want to build!