Closing the Loop - Harnessing Circular Economy Strategies for Climate Change Mitigation

Sabeka Ismaeel is a Research Analyst at the Bahrain Center for Strategic, International, and Energy Studies (Derasat).

Climate change has quickly become one of the most prominent issues of the modern era. Temperatures are rising year after year, and natural disasters are becoming more severe and frequent. While it is still debated whether this is the price of unprecedented economic growth, humanity now has no choice but to adapt to these recurring phenomena and work to mitigate their immense impact. This encompasses various dimensions that require a fundamental transformation of life as currently known, centering attention on both human and ecological wellbeing. Human development over the past few centuries focused on a linear consumption model, an approach of “take-make-waste,” leading to resource depletion and ecological degradation.

An illustration showing the benefits of the circular economy

Propelled by the desire to achieve sustainable development, the concept of circular economies rose in prominence within scientific, industrial, and regulatory domains. A circular economy is an economic system aimed at eliminating waste and promoting the continual use of resources. It is based on three core pillars: designing out waste and pollution, extending product/material lifecycles, and regenerating natural systems. In essence, circular economies focus on closing the consumption loop by creating a sustainable economic model that reduces consumption, minimizes environmental impact, and promotes economic resilience.

Transitioning to a circular economy holds significant potential for sustainable development in the environmental, social, and economic dimensions. With the overarching aim of protecting the environment, reusing and recycling products can decelerate natural resource consumption, minimize habitat disruption, and help curb biodiversity loss. Furthermore, designing efficient processes and creating sustainable products reduce energy consumption, thereby lowering harmful greenhouse gas (GHG) emissions. These activities contribute to climate change mitigation, while simultaneously allowing for the establishment of adaptation strategies that ensure economic resilience in the face of climate disasters.

Circular economies also target the reduction of raw material dependence, which is particularly important to cope with growing populations and increasing urbanization. Finite material supplies usually lead to dependence on international partners, raising security concerns. Raw material recovery and recycling mitigate risks linked to supply chain dynamics, such as price volatility, availability, and import dependency. This especially applies to critical raw materials, which are required for the production and operation of various technologies. On the other hand, transitioning to a circular economy increases market competitiveness, stimulates innovation, boosts economic growth, and creates additional jobs for the labor market. This also leads to the provision of more durable and innovative products to consumers, enhancing their quality of life and, in the long term, reducing a significant portion of their expenses.

Global momentum on fostering sustainable practices has catalyzed the proliferation of circular economy initiatives. For example, the European Union’s goal of continental climate neutrality by 2050 relies on circular economy as a key pillar in this transition. The EU’s Circular Economy Action Plan, launched in 2020, aims to reduce pressure on natural resources, create sustainable growth, and halt biodiversity loss. Notably, the plan targets focusing on sectors that use the most resources and have a high potential for circularity, such as electronics, vehicles, packaging, plastics, textiles, construction, food, and water.

In Asia, countries such as Japan and South Korea are also implementing comprehensive circular economy policies, emphasizing waste reduction, material recovery, sustainable production, and responsible consumption. Japan launched its first Circular Economy Vision in 1999, which served as the building block for its Circular Economy Vision 2020. The latter targets securing economic growth without compromising on environmental stewardship, manifested through circularity. On the other hand, South Korea launched a national strategy to promote a circular economy across nine major industries in 2023. The strategy aims to reduce carbon emissions and stabilize domestic supply chain of key resources. These industries include petrochemicals, steel, non-ferrous metals, batteries, electronics, textiles, automobiles, machinery, and cement.

Globally, industries are increasingly adopting circularity as a core strategy, driven mainly by consumer demand for sustainable products and services. Capitalizing on several economic advantages, multinational corporations are integrating resource efficiency and waste minimization into their operations. For instance, the electronics industry is moving towards modular designs that facilitate repair and upgrade, thereby extending product lifespans. In the fashion industry, brands are exploring new business models such as clothing rental, resale, and recycling programs to reduce waste. Technology is a key enabler in this shift to circular economies. Artificial intelligence, the Internet of Things, and blockchain are leveraged to enhance supply chain transparency and efficiency, enabling better tracking and management of resources. Moreover, waste-to-energy technologies are gaining significant traction as the global race towards clean energy intensifies. It is essential to catalyze technological innovation, as these technologies are critical for scaling circular economy practices globally. This allows for a sustainable, resilient, and fiscally viable closure of resource loops.

To close the resource loop, circular economies promote several strategies, including effective waste management. A circular economy closes the loop between extraction, manufacturing, and disposal by encouraging the design of products to reduce waste, prolonging the lives of products and materials, and recycling materials from end‐of‐life products back into the economy. This aligns with the fundamentals of effective waste management, which is the systematic handling, reduction, treatment, and disposal of waste to minimize environmental impact. Waste, the silent shadow of modern living, refers to all substances or objects which are disposed of, or are intended to be disposed of. As consumption patterns grow, so does the complexity and volume of waste generated. This necessitates streamlining processes that cover the collection, transport, and disposal of wastes, including after-care of disposal sites.

The significance of effective waste management lies in its paramount role in preserving ecosystems, protecting public health, preventing pollution, and conserving valuable resources. Examining broader implications, effective waste management contributes to climate change mitigation by reducing GHG emissions from landfills and lowering the demand for energy-intensive production processes. Notably, varying priorities and progress levels among countries can redirect the definition of effective waste management. For example, landfilling can be an efficient solution in a country where open dumping is still practiced, while it would be highly impractical in a country with limited geographical spaces. To understand effective waste management comprehensively, it is essential to track its value chain from inception to resolution through four main stages: waste generation, collection, treatment and disposal, and governance.

Waste management begins with the first stage of the value chain, waste generation. This initial phase involves the creation and accumulation of waste materials from residential, commercial, and industrial sources. Waste generation encompasses a wide range of materials, including municipal solid waste, hazardous waste, construction waste, medical waste and industrial non-hazardous waste. Municipal solid and non-hazardous waste constitute some of the largest anthropogenic sources of methane emissions. In comparison with other waste forms, there are also several advantages for resource recovery from MSW, including cost-effectiveness, lower environmental impact, and higher productivity.

The second stage along the waste management value chain is collection, which involves systematically gathering waste materials generated by households, businesses, and other sources. Effective collection schemes ensure proper segregation for subsequent processing, serving as a pivotal link between generation and treatment/disposal. This is essential for maximizing resource recovery and minimizing environmental impacts.

Subsequently, the third stage covers treatment and disposal, which involves processing and managing waste to minimize environmental impact and maximize resource recovery. This includes various methods such as recycling, incineration, landfilling, or other environmentally responsible techniques.

Finally, the last stage of the waste management value chain is the governance mechanism. In this context, governance is defined as the development and implementation of policies, regulations, and monitoring systems. Effective waste management relies heavily on robust governance structures to coordinate efforts among various stakeholders efficiently, promoting resilience and sustainability.

Successful governance requires reframing wastes as valued resources by adopting a holistic approach to waste management. This entails the establishment of a sound institutional structure, with well-defined functions, roles, responsibilities and inter-relationships between all stakeholders. Consequently, effective policies and policy actions are needed to guide the planning process across both local and central government authorities. The legal framework required to enable the achievement of policy objectives and actions must also be determined. Various governance mechanisms around the world also employ nudge policies to advance public objectives by influencing the behavior of waste producers and managers, thereby making incremental changes in service level and performance at a national scale.

Across the value chain, there are key pillars that contribute to the success of effective waste management schemes. First, the establishment of clear definitions, standards, and classifications for the various types of waste is essential, leading to systematic policy development. This provides a basis for shared expectations, facilitates effective collaboration, and enables accurate assessments. Having centralized frameworks, policies, and regulators, while maintaining enough flexibility for local governments to implement strategies and policies efficiently is also important. Centralization allows for a cohesive and standardized approach to governance, ensuring a unified direction and adherence to overarching principles. Complementing centralization by strengthening policy implementers with a certain degree of flexibility enables the enactment of policies and regulations in accordance with the local requirements of each area. This provides local governments with a higher degree of adaptive power, such that there is more resilience and agility when facing uncertainties. To further strengthen centralized systems, effective monitoring and reporting schemes must be enacted. Facilitating access to accurate and timely data enables authorities to evaluate the performance of the waste management system, identify strengths and challenges, and expedite evidence-based decisionmaking. This leads to optimizing resource allocation, enhancing policy effectiveness, and mitigating environmental impacts.

While most countries globally are on their path towards digital transformation, it is imperative to leverage data-driven approaches in effectively and consistently monitoring waste management processes. This includes developing a centralized digital system that allows waste producers, collectors, and treatment facilities to engage with the authorities and report on their processes in real time. Synchronizing this centralized system across regional borders can also increase opportunities for regional cooperation to close resource loops. Establishing a digital database could further enhance integration and serve as a strong incentive for invigorating the sector through electricity generation, material extraction, or recycling activities.

Furthermore, establishing a vision of zero waste societies, with a measurable target for the closure of key resource loops (depending on each country’s requirements) is fundamental in laying the grounds for a productive circular economy. This compels countries to increase investments in emerging technologies, environmental startups, as well as research and development. The importance of this step is based on the effects of transparency deficits, which weaken stakeholder engagement and collaboration. The waste management landscape then becomes characterized by high fragmentation and a lack of productive communication, which is a setback in the striving to achieve circular economies.

Reflecting on investments and entrepreneurship, such challenges can pose threats to the functional commercialization of waste management, thereby reducing market opportunities. International best practices stem from the development of a stable market for waste management and ancillary services. Consequently, these trends stimulate the market for developing, adopting, and commercializing various waste management solutions across the entire value chain. Therefore, an entire sector is created, with potential socio-economic effects through job creation, material recovery, and environmental preservation. However, it must be acknowledged that the activation of such schemes depends on a country’s ability to rely on multiple waste treatment processes, including digestion, incineration, recycling, and recovery. The availability of varying treatment processes promotes a holistic and adaptable approach to waste management, addressing environmental, economic, and social considerations. This is only feasible due to the existence of efficient collection and segregation systems.

The key characteristics of an effective waste collection system include systematic scheduling, widespread community participation, streamlined segregation practices, well-maintained infrastructure, and robust monitoring mechanisms. Collectively, these factors ensure the proper and sustainable management of diverse waste streams. This further highlights the significance of collaboration and stakeholder engagement. Industrial alliances with policymakers, and the involvement of NGOs and educational institutes, are all notable examples of the latter. Waste management is an area that requires high civic engagement to achieve the desired objectives, otherwise, policies and regulations would be an ineffective public burden. Hence, strong awareness campaigns emphasizing citizen responsibility for lower waste generation and higher resource utilization are crucial. Embedding these campaigns within the education system further strengthens their effects, ensuring that sustainable waste management practices become a behavioral trend among the wider population.

With the focus on waste minimization from source, best practices usually include a form of an economic incentive to achieve this goal. Based on the “polluter should pay” principle, these incentives nudge citizens to reduce consumption and waste generation. By leveraging a proportional payment scheme, citizens are charged more when the amount of waste generated is higher. This allows for a deeper psychological penetration, steering public behavior towards waste reduction, specifically for priority waste streams, such as food waste, electric and electronic waste, and packaging. Essentially, priority waste streams require specific treatment and handling processes to ensure achieving the highest levels of material/energy recovery and the lowest environmental impacts.

While economic incentives are an inevitable approach to reform waste management systems, there are some considerations that might hinder the streamlining of this process. First, the pricing mechanism must be thoroughly studied, through both quantitative and qualitative research. Lower prices may appeal to the public, thereby having minimum social impacts, however, they might also be ineffective in encouraging people towards waste reduction. On the other hand, higher prices will have a positive impact on consumption and waste reduction, but might trigger public dismay, especially in regions with high welfare. In addition, countries must factor in the income disparities between various social groups, to ensure that effective waste management does not become synonymous with climate injustice towards lower-income citizens or residents.

These strategies target the creation of a circular economy by solving current challenges directly from the root (i.e., demand side). Demand-side solutions provide a more sustainable approach to controlling consumption and protecting resources. Some countries with renowned effective waste management systems, such as Singapore and Sweden, have built their waste management strategies in the past century on supply-side solutions. However, these countries have now shifted their perspective towards a zero-waste future by effectively managing waste generation from source. This indicates that while it is important to provide adequate waste management infrastructure, it is even more important to resolve the root cause of resource wastage, particularly with modern challenges of increased urbanization, population growth, climate change, and scarcity.

Effective waste management requires significant behavioral changes, which need to follow a gradual structure to ensure sustainability. For example, forcing households on a strict waste segregation system as an initial step will likely result in a failing strategy. Instead, a commingled collection system, such as the one deployed in Singapore, can be used in preliminary stages. In addition, establishing sorting facilities and ancillary markets allows for the creation of jobs, thereby progressively improving the psychological and social perceptions on the waste management sector. Stakeholder engagement and collaboration are pivotal in all stages.

The urgency of waste management is derived from its nature as a cumulative problem, wherein delays in deploying effective solutions exacerbate the situation and increase complexities. In an interconnected web of environmental considerations, effective waste management emerges as a practical necessity for immediate wellbeing, as well as a pivotal strategy in building a resilient future for humanity on the planet. It also plays a key role in guiding the wise usage of natural resources to ensure harmonization between economic development, ecological restoration, and biodiversity preservation. A high level of civic engagement is required to achieve such targets, which necessitates raising public awareness. This must be supplemented with policy nudges and incentives that encourage societies to adopt more sustainable behaviors, without compromising on convenience or cultural values. Collective effort is essential for navigating the complexities of waste reduction and promoting a circular economy that minimizes environmental impact. Therefore, it is crucial to view waste not just as a challenge but as an opportunity for innovation, job creation, and long-term environmental preservation. By integrating this mindset into policy frameworks and fostering a culture of environmental stewardship, there is significant potential to create an effective waste management landscape, shaping a more resilient future. Visualizing trash as treasure is no longer the philosophy of dreamers, rather it has become a central tenet of modern circularity and sustainability. 

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