Surplus is necessary for resilience in an unpredictable world

Our flood management systems are under increasing pressure. In recent years the UK has been hit by several extreme floods which have ruined homes and businesses, and taken lives. Population growth and climate change are expected to make flooding worse: analysis for the 2017 Climate Change Risk Assessment estimated that flood risk will increase by at least a half by 2080 unless significant action is taken.

But forecasts are almost always wrong. Economist John Kenneth Galbraith said that “there are two kinds of forecasters: those who don’t know, and those who don’t know they don’t know.” Uncertainty abounds in our complex world and forecasts can have significant impacts on people’s lives – just ask Michael Fish.

There are many such examples of events which are highly significant yet impossible to predict. The 2011 earthquake, and resulting tsunami in Japan which killed nearly 16,000 people, was larger than experts thought was possible. The UK government was caught out in 2015 when the flooding of Storm Desmond damaged 5,200 homes in Cumbria and Lancashire, racking up an estimated insurance bill of £1.3bn.

These are both examples of Black Swans – a term popularised by Nassim Taleb to define an improbable and consequential event. Until the nineteenth century, people thought all swans were white. One black swan was enough to discredit this idea.

But our inability to forecast the future is not a reason to ignore it. Even though we can’t predict the impact that population growth and climate change are going to have on the number or severity of floods, we should ensure that we are robust to these negative events–our infrastructure should be ready.

Taleb argues that an answer is redundancy. Just as evolution developed humans with two kidneys, surplus is necessary for resilience in an unpredictable world.

Infrastructure investment decisions currently aim to maximise efficiency. Those decisions are based on a principle of ‘predict and provide’. With uncertainty, this approach often results in under-provision.

A focus on efficiency rather than resilience is pervasive across all types of infrastructure but it was not always the case. In response to the Great Stink of 1858, Joseph Bazalgette calculated the requirement for London’s sewer system based on generous levels of sewer provision for the capital’s residents, before doubling it. Only recently has that system started to reach capacity.

Resilience and efficiency are opposites. The power of redundancy is that it enables society to be robust to uncertainty; to be adaptable. Efficiency leaves no wiggle room.

When dealing with complex systems it is important to be aware of the limits of our knowledge. A focus on efficiency aims to maximise value for money. That only works if you can predict the future with a degree of certainty. The lessons about resilience and redundancy are applicable to all infrastructure investment but are particularly relevant for flooding where the risks of getting it wrong are significant. Ensuring that our infrastructure is resilient – capping the downside – is vital if we want a Black Swan robust society.

Alex O’Byrne

Image: Floods by Bob Bower via Geograph is licensed under CC by 2.0

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t: +44 020 8878 6333

Alex O’Byrne, Associate at Volterra, is an experienced economic consultant specialising in economic, health and social impact, economic strategy, project appraisal and socio-economic planning matters.

Alex has led the socio-economic and health assessments of some of the most high profile developments across the UK, including Battersea Power Station, Olympia London, London Resort, MSG Sphere and Westfield. He has significant experience inputting to EIAs and s106 discussions as well as drafting economic statements, employment and skills strategies and affordable workspace strategies.

Alex is also experienced at economic appraisal for infrastructure. He was project manager of the economic appraisal for the City Centre to Mangere Light Rail in Auckland. He also led the economic and financial appraisals of the third tranche of the Transport Access Program for Transport for New South Wales, in which Alex developed and employed innovative methodological approaches to better capture benefits for individuals with reduced mobility.

He is interested in the limitations of current appraisal methodologies and ways of improving economic and health analysis to ensure it is accessible to as many people as possible. To this end, Alex recognises the importance of transparent and simple to understand analysis and ensuring all work is supported by a robust narrative.

Alex holds a BSc (Hons) in Economics from the University of Manchester and he was a member of the first cohort of the Mayor’s Infrastructure Young Professionals Panel.


Senior Partner

t: +44 020 8878 6333

Ellie is a partner at Volterra, specialising in the economic impact of developments and proposals, and manages many of the company’s projects on economic impact, regeneration, transport and development.

With thirteen years experience at Volterra delivering high quality projects to clients across the public and private sector, Ellie has expertise in developing methods of estimating economic impact where complex issues exist with regards to deadweight, displacement and additionality.

Ellie has significant experience in estimating the economic impact across all types of property development including residential, leisure, office and mixed use schemes.

Project management of recent high profile schemes include the luxury hotel London Peninsula, Battersea Power Station and the Nova scheme at London Victoria. Ellie has also led studies across the country estimating the economic and regeneration impact of proposed transport investments, including studies on HS2 and Crossrail.

Ellie holds a degree in Mathematics and Economics from the University of Cambridge.