ISET Economist Blog

Developing a circular economy in Georgia – the benefits, achievements, and challenges
Tuesday, 26 April, 2022

Circular economy and integrated waste management are both concepts we often hear when discussing issues of ecological well-being or climate change. This way of imagining the economy has already gained a foothold in many countries. The idea of the circular economy itself implies a different attitude towards patterns of production and consumption, that which aims to minimize wasted resources. Under this new vision, we can distinguish the so-called 3R principle, with its three components of Reduce (minimize the misuse of products and lessen waste), Reuse (try to use a product and its valuable or functional components as much as possible), and Recycle (do not destroy or bury waste, rather find a new use instead). Thus, the notion of the circular economy, by its very nature, implies a non-linear approach to the use of resources. While the principle of waste recycling indicates the reuse of raw materials, which thereby saves resources and avoids the negative consequences of adverse environmental impacts.

Sustainable production and consumption are one aspect of the United Nation’s Sustainable Development Goals (SDGs). Despite efforts from several states, there is still a long way to go before attaining the goals set under this plan. For example, a reduction of consumption per capita has been observed in Europe, Australia, New Zealand, and North America (2000-2017), however consumption in all other regions of the world is increasing much faster and, in general, global trends are also slanted upwards. Moreover, the annual per capita volume of electronic waste is increasing from year to year (from 5.3 kg in 2010 to 7.3 kg in 2019), while the recycling rate is rising much more slowly than hoped (1.3 kg in 2010 and 1.7 kg in 2019). At this rate, achieving the 9 kg recycling target by 2030 seems hard to imagine.[1]

It is notable that the first steps have also been taken in Georgia. Although, the country is still a long way from full implementation of waste recycling principles and the achievement of goals at a reasonable cost. For now, it seems worth considering what the main benefits of these aforementioned concepts really are, and how realistic it will be to introduce them actively and efficiently into Georgia.

First of all, let’s focus on the real benefits associated with the introduction of a waste recycling mechanism. Various calculations have suggested that effective waste management may provide the basis for economic growth. According to the resource management modelling from the United Nations Environment Programme (UNEP),[2] by 2050 – at the world level – it would be possible to receive trillions more dollars in economic benefits compared to the alternative status quo scenario. By World Economic Forum estimates, it is difficult to accurately predict how productivity will increase, although it is safe to say that the potential for employment growth in the transition to a circular economy is obvious (data calculated in 2014 shows job creation potential of over one million employees in Europe).

It is important to single out two main dimensions along which the benefits from transitioning to a circular economy may occur:

  1. Environmental issues:

The first major consequence of the transition to a circular economy is the mitigation of climate change and a reduction in environmental pollution. According to the U.S. Environmental Protection Agency (EPA), in 2018, municipal solid waste recycling and incineration reduced emissions by approximately 193 million tons of carbon dioxide equivalent. Critically, these reductions are roughly comparable to the annual emissions of 42 million cars in the USA. At a more macro level, this process will have a particularly positive impact on the entire ecosystem, especially on seas and oceans.

National Geographic highlights that any debris that gets into oceans or seas poses a threat not only to aquatic life, but also to humans. The fact is marine life often confuses plastic and other types of waste with food, and when it is consumed, toxic substances remain in their bodies. This becomes a problem for the whole food chain, and it can eventually have a significant impact on human health. Around 14 million tons of plastic waste are dumped into the ocean each year, accounting for 80% of marine waste. One of the main reasons this occurs is inadequate waste management and recycling, as well as the illegal dumping of waste. On average, only 9% of plastic waste is recycled, where 12% is incinerated and 79% is discarded directly into the environment or landfills (Kumar et al., 2021). It has been estimated that by 2040, the mass of plastic waste reaching the ocean could reach 30 million tons a year. Under various calculations, this number could be reduced by utilizing different policies. The largest reduction (-82% in 2040, compared to the current forecast)[3] is estimated within a scenario in which the average person’s approach to the consumption and processing of products systemically changes – alongside connecting people to waste collection systems. This again leads back to the 3R principle. By reducing waste generation, recycling, and finding alternative methods of disposal, the circular economy will help reduce the impact of plastic pollution (Kumar et al., 2021). As such, raising human awareness and changing everyday approaches to consumption will clearly be the most effective alternative for protecting the environment.

  1. Economic benefits:

Alongside the positive environmental impact, one significant advantage of waste recycling is the prospect of developing the labor market (Pearce & Stilwell, 2008). In this respect, those activities related to the stages of waste collection, recycling, and reuse should each be considered. A study conducted by the Green Alliance in 2021 suggests that transitioning towards the circular economy in the UK, according to various scenarios, could significantly increase the number of jobs in the country. For example, it is estimated that if the level of recycling accelerated by 20%, a further 200,000 jobs would be created in the sector by 2035. However, if the economy were fully transformed (50% growth in recycling), an additional 472,000 new jobs (almost 2% of the total current UK workforce) could be created by 2035.

One potential benefit also relates to the increase in people’s financial stability. According to 2019 calculations, the average American spends around $1,497 a month on consumption that they do not need (so-called "excess consumption"). Therefore, in addition to positive impacts on the labor market, on the environment, and various ecosystems, having more rational and sensible consumption would also simply reduce people’s costs, thereby benefitting their financial stability.


According to Georgia’s 2030 Climate Change Strategy, there are 57 non-hazardous waste landfills in the country; 34 are operational and the remaining 23 are closed. Approximately 900,000 tons of municipal waste is generated annually, of which about 700,000 tons is disposed of in official landfills, and the rest in illegal landfills or incinerated in open spaces.[4] The National Waste Management Strategy and Action Plan of Georgia notes that all existing illegal landfills should have closed by the end of 2020, and important steps have been taken in this direction. Namely, between 2018-2020, 420 illegal landfills were cleaned and eliminated (MEPA, 2022). However, around 400 illegal landfills have still been reported across 40 municipalities.[5] Most of these are located on riverbanks, which poses a risk of water contamination.[6] To resolve this problem, illegal landfills are currently being closed and their management is being improved during the transition period. The arrangement of regional landfills and the development of a hazardous waste management infrastructure has also actively started (MEPA, 2022).

It should further be highlighted that a Waste Management Code has been developed in Georgia, which envisages the gradual introduction and proper functioning of separate waste collection throughout municipalities. One aspect of this legislation is that each municipality should ensure the collection of differentiated municipal waste, with the introduction of necessary systems for collecting waste and its proper functioning. The step-by-step introduction of separate municipal waste collection should have started in 2019, however, except a few pilot projects, no significant actions have yet been taken (MEPA, 2022).

Once collected, differentiated waste needs to be processed. Although there are around 100 waste processing plants in the country, their technologies often do not meet modern environmental requirements or standards. Moreover, there is currently no biodegradable waste recycling infrastructure (MEPA, 2022).

It is also significant that reusing is a more efficient and eco-friendly method of reducing waste than recycling. The recycling process is associated with energy consumption that itself generates waste and pollutes the environment. We presently have only a small practice of reusing waste in Georgia. For example, there are around ten companies operating in the field of plastic processing, which sort plastic waste and fragment it into pieces. Certain companies also process secondary raw materials for the production of polyethylene bags, as well as various construction and household products. Nevertheless, for most entrepreneurs, pressing and exporting plastic waste for recycling abroad is more profitable.

Consequently, the question arises, what can be done to make the process run faster and more efficiently?

Public support and raising awareness on waste management issues, and every citizens’ role in reducing waste, becomes essential for the proper functioning of municipal waste management systems. Despite public awareness events implemented under various projects, the general undertsanding of waste management issues remains low (MEPA, 2022). Education of the public, in order to work together to reduce pollution (by reusing products and not dumping in illegal landfields), must therefore be proactively promoted and enforced (Kumar et al., 2021).

Furthermore, in order for the country’s green development-oriented mechanism to be actively and widely implemented, it is important to have the appropriate infrastructure in place and to ensure the actions of every actor are consistent with the ultimate goal of the system. For example, if the separated waste is discarded in the same landfill, this separation effort will have been in vain, and the process will not reach its final objective or reducing waste. It should also be noted that interest from the private sector could act as catalyst for the introduction of such a mechanism. This also leads us to the problem of lack of awareness within businesses. The business sector needs to be educated and convinced that waste recycling can bring not only economic but also financial benefits.


Overall, the transition to a circular economy is considered by the scientific community to be an extremely positive and profitable process. Moving towards this form of economy could have the greatest positive effect on both ecology and the economy, and its impact could translate into new jobs, a more secure environment, and growing prosperity. This is an opportunity Georgia should not let pass by. Currently, we are only in the initial stages of transitioning into a circular economy, and there is a long way to go before we can fully implement the circular approach to resource management. Even waste management is problematic in Georgia today, and most landfills are in poor condition. However, important steps have been already taken, with hundreds of illegal and faulty municipal landfills being cleaned or closed. Separate waste collection has also been introduced, although its enforcement is not effective in almost any municipality. A lack of information on waste management issues and the public’s role in reducing waste, as well as the potential benefits of waste recycling among the public and the private sector, are still major concerns, and effective steps must be taken to address these problems. Consequently, joint and consistent efforts from both society and the state are needed to transition the country towards a circular and more eco-friendly economy, and to contribute to solving the global problem of waste reduction.

[1] Ibid.

[2] Existing forecast in 2017 for the GDP in 2050.

[3] Existing 2020 forecast regarding the level in 2040.

[4] Ibid.

[5] Thematic Inquiry of the Committee on Environment and Natural Resources of the Parliament of Georgia on the situation in the field of municipal waste, 2020.

[6] National Report on the State of the Environment of Georgia 2014-2017, 2019, pp. 179-180.

The views and analysis in this article belong solely to the author(s) and do not necessarily reflect the views of the international School of Economics at TSU (ISET) or ISET Policty Institute.