DefinePK

Abstract

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, 2025Last Revised: August 25, 2025Accepted:  October 16, 2025
Conflict of Interest: The Authors declared no Conflict of InterestAcknowledgment: No administrative and technical support was taken for this research.Funding: No funding was received for this research