Driving circular economy transitions through technological innovation in the top five waste-generating economies

Abstract

The rapid increase in global consumption has led to substantial growth in waste generation, posing a significant challenge to achieving the Sustainable Development Goals (SDGs), particularly SDGs 11 and 12, which emphasize waste reduction. Technological progress in waste management and the ability to adapt these innovations to environmental needs play a crucial role in mitigating waste‑related pressures. This study investigates how economic growth, urbanization, environmental policy stringency (EPS), and innovations in waste management, recycling and reuse, and wastewater treatment affect the load capacity factor (LCF) in the top five waste-generating economies (U.S., Japan, Germany, France, and Türkiye) from 2005 to 2020. Using the Augmented Mean Group (AMG) and Half‑Panel Jackknife (HPJ) estimation approaches, the analysis reveals that economic growth and urbanization reduce LCF, indicating increased environmental degradation. In contrast, patents related to waste management, recycling, and wastewater treatment technologies improve LCF, supporting progress toward SDGs 11 and 12. EPS, however, shows no significant effect, highlighting inconsistencies in policy enforcement across these economies. Overall, the findings underscore the need for stronger regulatory frameworks that tighten environmental policies and incentivize technological innovation to advance circular economy transitions.