Enhancing Industrial Competitiveness through Circular Economy Solutions in Pakistan
DOI:
https://doi.org/10.59926/jodprp.vol09/06Keywords:
Circular Economy, Environment, Supply Chain, Reuse, Recycle, Digital Transformation, AI, IoT, Textile, Mining, Industry, SEZ, Green Energy, Policy, Trade, InvestmentAbstract
The circular economy (CE) is an emerging economic paradigm focused on minimising waste, maximising resource efficiency, and achieving sustainable development through closed loop systems. This paper provides a comprehensive overview of the CE concept, with a particular focus on its background, global benefits, challenges, and socioeconomic implications, particularly in the context of Pakistan. Using a qualitative research methodology that includes comparative policy analysis and expert interviews, the study examines global best practices and national CE policies in India, Vietnam, Türkiye, China, Germany, and Pakistan, identifying three globally effective CE models. It further categorises investable CE-aligned projects across Pakistan’s mining, energy, agriculture, textile, and industrial sectors. The findings reveal significant opportunities for Pakistan, including the potential to generate USD 500 million in value through waste valorisation, reduce carbon emissions by 30%, and contribute an estimated 3-4% to GDP while creating green jobs. However, challenges such as regulatory gaps, insufficient infrastructure, and limited institutional capacity persist. The study highlights the interlinkages between CE and global green transitions and assesses the relevance of evolving international trade and investment regulatory frameworks and financing sources. Key policy recommendations include the development of a national CE roadmap, policy and regulatory reform, strategic infrastructure investment, targeted capacity building programmes, and active engagement with global investors and green finance platforms. These steps are essential to facilitating Pakistan’s smooth and inclusive transition towards a circular and sustainable economic model.
JEL Classification Codes: E24, E61, F23, G18, G24, O13, O14, O31, O44, P28
Submitted: March 06, 2025
Last Revised: August 25, 2025
Accepted: October 16, 2025
Conflict of Interest: The Authors declared no Conflict of Interest
Acknowledgment: No administrative and technical support was taken for this research.
Funding: No funding was received for this research
Downloads
Metrics
References
Anjum, M.S., Ali, S.M., Subhani, M.A., Anwar, M.N., Nizami, A-S., Ashraf, U. and Khokhar, M.F. 2021, ‘An Emerged Challenge of Air Pollution and Ever-Increasing Particulate Matter in Pakistan; A Critical Review’, Journal of Hazardous Materials, vol. 402, p. 123943, <https://doi.org/10.1016/j.jhazmat.2020.123943>. DOI: https://doi.org/10.1016/j.jhazmat.2020.123943
Antonopoulos, I., Faraca, G. and Tonini, D. 2021,’ Recycling of Post-Consumer Plastic Packaging Waste in the EU: Recovery Rates, Material Flows, and Barriers, Waste Management, vol. 126, pp. 694-705, <https://doi.org/10.1016/j.wasman.2021.04.002>. DOI: https://doi.org/10.1016/j.wasman.2021.04.002
Baldassarre, B. and Carrara, S. 2025, ‘Critical Raw Materials, Circular Economy, Sustainable Development: EU Policy Reflections for Future Research and Innovation’, Resources, Conservation and Recycling, vol. 215, p. 108060, <https://doi.org/10.1016/j.resconrec.2024.108060>. DOI: https://doi.org/10.1016/j.resconrec.2024.108060
Barral, M.A.A. 2024, ‘The Nexus between Trade and Investment, ESG, and SDG’, PIDS Discussion Paper Series No. 2024-28, Philippine Institute for Development Studies <https://doi.org/10.62986/dp2024.28>. DOI: https://doi.org/10.62986/dp2024.28
Barua, S. 2020, ‘Financing Sustainable Development Goals: A Review of Challenges and Mitigation Strategies’, Business Strategy & Development, vol. 3, no. 3, pp. 277-293, <https://doi.org/10.1002/bsd2.84>. DOI: https://doi.org/10.1002/bsd2.94
Bouhia, G. 2022, ‘Applying the Circular Economy Concept to a Sustainable Business Model for Large Retailers: The Case of IKEA’, International Journal of Competitiveness, vol. 2, no. 3, pp. 212-233, <https://doi.org/10.1504/IJC.2022.1274>. DOI: https://doi.org/10.1504/IJC.2022.127400
Bressanelli, G., Visintin, F. and Saccani, N. 2022, ‘Circular Economy and the Evolution of Industrial Districts: A Supply Chain Perspective’, International Journal of Production Economics, vol. 243, p. 108348, <https://doi.org/10.1016/j.ijpe.2021.108348>. DOI: https://doi.org/10.1016/j.ijpe.2021.108348
Bryan, M.C. 2023, Austin City Limits: A Degrowth Future for a Booming Texas City, Master’s Thesis, Department of Community and Regional Planning, University of Texas at Austin, <https://doi.org/10.26153/tsw/58384>.
Chabowski, B. R., Gabrielsson, P., Hult, G.T.M. and Morgeson III, F.V. 2023, ‘Sustainable International Business Model Innovations for a Globalizing Circular Economy: A Review and Synthesis, Integrative Framework, and Opportunities for Future Research’, Journal of International Business Studies, vol. 56, pp. 383-402, <https://doi.org/10.1057/s41267-023-00592-9>. DOI: https://doi.org/10.1057/s41267-023-00652-9
Chen, L., Jia, F., Steward, M. D., and Schoenherr, T. 2022, ‘The Role of Technology in Enabling Circular Supply Chain Management’, Industrial Marketing Management, vol. 106, pp. A1-A6, <https://doi.org/10.1016/j.indmarman.2022.05.013>. DOI: https://doi.org/10.1016/j.indmarman.2022.05.013
Ehrenfeld, J. and N. Gertler. 1997, ‘Industrial Ecology in Practice: The Evolution of Interdependence at Kalundborg’, Journal of Industrial Ecology, vol. 1, no. 1, pp. 67-79, <https://doi.org/10.1162/jiec.1997.1.1.67>. DOI: https://doi.org/10.1162/jiec.1997.1.1.67
Gaustad, G., Williams, E. and Leader, A., 2021, ‘Rare Earth Metals from Secondary Sources: Review of Potential Supply from Waste and Byproducts’, Resources, Conservation and Recycling, vol. 167, p.105213, <https://doi.org/10.1016/j.resconrec.2020.105213>. DOI: https://doi.org/10.1016/j.resconrec.2020.105213
Geissdoerfer, M., Savaget, P., Bocken, N.M.P. and Hultink, E.J. 2017, ‘The Circular Economy–A New Sustainability Paradigm?’, Journal of Cleaner Production, Vol. 143, pp. 757-768, <https://doi.org/10.1016/j.jclepro.2016.12.048>. DOI: https://doi.org/10.1016/j.jclepro.2016.12.048
Gielen, D., Boshell, F., Saygin, D., Bazilian, M.D., Wagner, N. and Gorini, R. 2019, ‘The Role of Renewable Energy in the Global Energy Transformation’, Energy Strategy Reviews, vol. 24, pp. 38-50, <https://doi.org/10.1016/j.esr.2019.01.006>. DOI: https://doi.org/10.1016/j.esr.2019.01.006
Hald-Mortensen, C. 2025, ‘Applying the Rumsfeld Matrix to Biodiversity Loss: A Brief Review’, Journal of Ecology & Natural Resources, vol. 9, no.1, pp. 1-13, <https://doi.org/10.23880/jenr-16000411>. DOI: https://doi.org/10.23880/jenr-16000411
Hassan, K., Kaur, P. and Vijayasingam, V. 2023, ‘E-waste-Study of Environmental Impacts and Waste Management Practices’, 2023 International Conference on Integrated Intelligence and Communication Systems (ICIICS), Kalaburagi, India, 24-25 November, <https://doi.org/10.1109/ICIICS59993.2023.10421364>. DOI: https://doi.org/10.1109/ICIICS59993.2023.10421364
Herrador, M., de Jong, W., Nasu, K. and Granrath, L. 2023, ‘Shaping a Circular Cities Declaration for Japan: Going Beyond the European Union Case Study’, Social Science Research Network, <http://dx.doi.org/10.2139/ssrn.4588476>. DOI: https://doi.org/10.2139/ssrn.4588476
Howlett, M. and Cashore, B. 2014, ‘Conceptualizing Public Policy’, in Engeli, I. and Allison, C.R. (eds.) Comparative Policy Studies, Research Methods Series, London: Palgrave Macmillan, <https://doi.org/10.1057/9781137314154_2>. DOI: https://doi.org/10.1057/9781137314154_2
Huang, Y.-F., Azevedo, S. G., Lin, T.-J., Cheng, C.-S., and Lin, C.-T. 2021, ‘Exploring the Decisive Barriers to Achieve Circular Economy: Strategies for the Textile Innovation in Taiwan’, Sustainable Production and Consumption, vol. 27, pp. 1406-1423, <https://doi.org/10.1016/j.spc.2021.03.007>. DOI: https://doi.org/10.1016/j.spc.2021.03.007
Iqbal, A., Abdullah, Y., Nizami, A.S., Sultan, I. A. and Sharif, F. 2022, ‘Assessment of Solid Waste Management System in Pakistan and Sustainable
Model from Environmental and Economic Perspective’, Sustainability, vol. 14, no. 19, p. 12680, <https://doi.org/10.3390/su141912680>.
Khan, O., Varaksina, N. and Hinterhuber, A. 2024, ‘The Influence of Cultural Differences on Consumers’ Willingness to Pay More for Sustainable Fashion, Journal of Cleaner Production, vol. 442, p. 141024, <https://doi.org/10.1016/j.jclepro.2023.141024>. DOI: https://doi.org/10.1016/j.jclepro.2024.141024
Kirchherr, J., Yang, N.H.N., Schulze-Spüntrup, F., Heerink, M.J. and Hartley, K. 2023, ‘Conceptualizing the Circular Economy (revisited): An Analysis of 221 Definitions’, Resources, Conservation and Recycling, vol. 194, p. 107001, <https://doi.org/10.1016/j.resconrec.2023.107001>. DOI: https://doi.org/10.1016/j.resconrec.2023.107001
Lew, R. and Van de Perre, L. 2024. Embracing Circularity: A Framework for Implementing Circular Practices in the Food Industry, Master’s Thesis, Department of Business Administration, Lund University.
Li, Y., Yang, C., Li, Y., Kumar, A. and Kleeman, M.J. 2022, ‘Future Emissions of Particles and Gases that Cause Regional Air Pollution in California Under Different Greenhouse Gas Mitigation Strategies’, Atmospheric Environment, vol. 273, p. 118960. DOI: https://doi.org/10.1016/j.atmosenv.2022.118960
Linnenluecke, M.K. 2022, ‘Environmental, Social and Governance (ESG) Performance in the Context of Multinational Business Research’, Multinational Business Review, vol. 30, no. 1, pp. 1-16, <https://doi.org/10.1108/MBR-08-2021-0103>. DOI: https://doi.org/10.1108/MBR-11-2021-0148
Maitre-Ekern, E. 2021, ‘Re-thinking Producer Responsibility for a Sustainable Circular Economy: From Extended Producer Responsibility to Pre-market Producer Responsibility’, Journal of Cleaner Production, vol. 286, p. 125454, <https://doi.org/10.1016/j.jclepro.2020.125454>. DOI: https://doi.org/10.1016/j.jclepro.2020.125454
Marrucci, L., Daddi, T. and Iraldo, F. 2021, ‘The Contribution of Green Human Resource Management to the Circular Economy and Performance of Environmental Certified Organisations’, Journal of Cleaner Production, vol. 319, p. 128859, <https://doi.org/10.1016/j.jclepro.2021.128859>. DOI: https://doi.org/10.1016/j.jclepro.2021.128859
METI 2020, Japan’s Energy 2020, Ministry of Economy, Trade and Industry, Tokyo, <https://www.enecho.meti.go.jp/en/category/brochures/pdf/japan_energy_2022.pdf>.
Neale, R.E., Barnes, P.W., Robson, T.M., Neale, P.J., Williamson, C.E., Zepp, R.G., et al., 2021, ‘Environmental Effects of Stratospheric Ozone Depletion, UV Radiation, and Interactions with Climate Change: UNEP Environmental Effects Assessment Panel’, Photochemical & Photobiological Sciences, vol. 20, no. 1, pp. 1-67, <https://doi.org/10.1007/s43630-020-00002-0>.
OECD 2021, The Europa Directory of International Organizations 2021, Routledge, pp. 677-687), <https://www.jstor.org/stable/pdf/resrep24785.pdf>.
Rajaonson, J. and Chembessi, C. 2024, ‘Exploring Circular Economy Transition Pathways: A Roadmap Analysis of 15 Canadian Local Governments’, Cambridge Journal of Regions, Economy and Society, vol. 17, no. 3, pp. 459-481, <https://doi.org/10.1093/cjres/rsae015>. DOI: https://doi.org/10.1093/cjres/rsae015
Rashid, M., and Gani, G. 2025, ‘Reimagining the Future of Sustainable Agriculture in South Asia: Integrating Ecological Resilience, Technological Innovation, and Inclusive Policy Reform for Transformative Agri-Systems’, in Bhat, A.H. (ed.) Precision Agriculture and Climate-Resilient Farming: Artificial Intelligence, IoT, and Blockchain for Sustainable Agriculture, vol. 118, Deep Science Publishing, pp. 118-135.
Rodriguez, G., Nierakkal, N. and Vithalani, V. 2023, Circular Economy and Trade in Textile Sector in Pakistan: Challenges and Opportunities in Complying with the EU Ecodesign Proposed Regulation, Submitted to the Permanent Mission of Pakistan to the World Trade Organisation, Geneva: International Economic Law Clinic, <https://tradelab.org/wp-content/uploads/2023/07/Group-1-Circular-Economy-and-trade-in-textiles-sector-in-Pakistan_-Final-draft.pdf>.
Schultz, F.C. and Reinhardt, R.J., 2022, ‘Facilitating Systemic Eco‐innovation to
Pave the Way for a Circular Economy: A Qualitative‐Empirical Study on Barriers and Drivers in the European Polyurethane Industry’, Journal of Industrial Ecology, vol. 26, no. 5, pp. 1646-1675, <https://doi.org/10.1111/jiec.13299>. DOI: https://doi.org/10.1111/jiec.13299
Semertzidis, T. 2022. ‘Circular Economy: From Panacea for Sustainability to Conceptual and Resource Realities’, in Corvellec, H. (ed.) The Impossibilities of the Circular Economy, London: Routledge, pp. 81-89, <https://ddd.uab.cat/record/293846>. DOI: https://doi.org/10.4324/9781003244196-10
Seto, K.C. 2023, ‘Strategies for Smart Net Zero Carbon Cities’, Bridge, vol. 53, no.1, <https://terpconnect.umd.edu/~austin/ence688r.d/papers-reading/NAE-Sustainable-Smart-Cities2023.pdf#page=17>.
Shah, M.A. 2024, ‘A Systematic Review of Electric Vehicle Innovations and Implementation Barriers’, Journal of Engineering and Computational Intelligence Review, vol. 2, no. 1, pp. 18-26, <https://jecir.com/index.php/jecir/article/view/17>.
Sharma, M.S. 2021, ‘Moving Beyond Disappointment: India, FDI, and Sustainability’, Asia Policy, vol. 16, no. 4, <https://doi.org/10.1353/asp.2021.0046>. DOI: https://doi.org/10.1353/asp.2021.0046
Slater, J., Han, J.Y., Adelina, C., Nikam, J., Archer, D., Nguyen, H. and Kim, D. 2022, Air Pollution and the World of Work: Policies, Initiatives and the Current Situation – A Scoping and Evidence Review for Southeast and East Asia, Stockholm Environment Institute, October, <https://www.sei.org/wp-content/uploads/2022/10/asia-air-pollution-work-sei2022.040.pdf>.
Sulaiman, S. 2024, The CPEC and SDGs in Pakistan: Measuring the Impact on Common Lives, Cham: Palgrave Macmillan, <https://doi.org/10.1007/978-3-031-65579-1>. DOI: https://doi.org/10.1007/978-3-031-65579-1
Uwuigbe, U., Issah, O., Ranti, U.O., Zubeiru, M., Anaba, S., and Seidu, A.A.J. 2025, ‘Circular Economy: A Bibliometric Review of Research in Emerging Economies (2010-2024)’, International Journal of Energy Economics and Policy, vol. 15, no. 1, pp. 77-89, <https://doi.org/10.32479/ijeep.17021>. DOI: https://doi.org/10.32479/ijeep.17021
Velenturf, A.P. and Purnell, P. 2021, ‘Principles for a Sustainable Circular Economy’, Sustainable Production and Consumption, vol. 27, pp. 1437–1457, <https://doi.org/10.1016/j.spc.2021.02.025>. DOI: https://doi.org/10.1016/j.spc.2021.02.018
World Bank 2020, Solid and Industrial Hazardous Waste Management Assessment: Options and Action Areas for Pakistan, Washington, D.C.: World Bank. <https://documents1.worldbank.org/curated/en/352371563196189492/pdf/Solid-and-industrial-hazardous-waste-management-assessment-options-and-actions-areas.pdf>.
Yang, M., Chen, L., Wang, J., Msigwa, G., Osman, A.I., Fawzy, S., Rooney, D.W. and Yap, P.S. 2023, ‘Circular Economy Strategies for Combating Climate Change and Other Environmental Issues’, Environmental Chemistry Letters, vol. 21, no. 1, pp. 55-80, <https://doi.org/10.1007/s10311-022-01499-6>. DOI: https://doi.org/10.1007/s10311-022-01499-6
Downloads
Published
How to Cite
Issue
Section
License
Copyright (c) 2025 Adnan Munir Rajput, Omer Chughtai
This work is licensed under a Creative Commons Attribution 4.0 International License.
