Circular Economy and Carbon Neutrality: Synergies, Pathways, and Policy Implications

Abstract

Global climate change, driven by industrialization and dependence on non-renewable energy, has made carbon neutrality an urgent international objective. This paper examines the role of the circular economy as a systemic complement to conventional decarbonization strategies. It argues that renewable energy deployment, carbon capture, and efficiency gains, while necessary, are insufficient without transforming how materials and products are produced, used, and recovered. Drawing on the concept of carbon as both an energy carrier and a material, the paper analyzes the mechanisms through which circular strategies resource efficiency, product life extension, waste valorization, recycling, and industrial symbiosis reduce greenhouse gas emissions across the waste, industrial, agricultural, urban, and energy sectors. A dedicated empirical case study section presents facility, cluster, and economy-level evidence, including an industrial symbiosis network in China that reduced CO₂ emissions by 1.09 Mt per year, equivalent to 3.63% of a city's total carbon footprint under a business-as-usual scenario. Life cycle assessment of municipal solid waste indicates average global emissions of 89.7 kg CO₂e per tonne in 2023, with open dumping contributing almost 70%, and modelling shows that circular economy implementation could achieve net-zero emissions from global municipal solid waste management by 2050. The paper concludes by discussing policy frameworks in the European Union and China, implementation barriers, and key challenges such as land-use trade-offs of bio-based materials and the high cost of carbon removal technologies, which range from $100 to $1,200 per ton of CO₂.