Circular Economy for Nepal’s Sustainable Development Ambitions

Abstract

The circular economy (CE) is a global proposition about decoupling consumption and production from resource use through reduce, reuse, and recycle (3R) and other r-strategies. In addition to promoting responsible consumption and production (SDG12), advocates claim the CE has wide-ranging impacts on sustainable development. Critics, however, see ambiguous definitions, practical conflicts with sustainability, and limited global appetite for a sustainability transition through the CE. Despite these criticisms, following the lead of other countries in Asia, Nepal has recently adopted the CE as an answer to waste recycling, sustainable tourism, energy generation, e.g., biogas, and and sustainable development in general. Until recently, the discussion about promoting circular r-strategies in Nepal, such as recycling, has lacked any critical review of circular claims for Nepal. Addressing this lack, this perspectives paper critically examines the scope and claims for the CE in Nepal relative to its sustainable development commitments. In contrast to the prevailing enthusiasm, our review finds that the CE may contribute little to Nepal’s development ambitions, that the EU influence is questionable, and the mainstream CE ignores a tradition of resource efficiency in Nepal. Our review suggests that other institutional demands must be met before with a transition to a sustainable circular economy can happen. The authors hope this perspectives paper will be read by governments, businesses, and other actors to inform a critical review of Nepal’s CE ambitions.

1. Introduction: An Umbrella Term on Waste and Resource Management

Having moved from a niche discussion in Europe and the UK, the circular economy (CE) has become a global corporate sustainability concept [1] for ecological modernization through technical innovation and resource efficiency [2,3,4]. According to one of the leading voices on the CE—the Ellen MacArthur Foundation (EMF)—by tackling waste, recirculating resources, and regenerating nature, the CE moves away from our current linear economy towards a close-looped system and a sustainable future [5]. The hope and expectation is that new circular business models will emerge from these efforts, including the sharing economy and other innovations [3,4,5].

Whether the holistic vision and claims of the CE are realistic is the subject of some debate. It is implicitly accepted by CE advocates that their vision depends on other assumptions that are not directly theorized by the CE model [6], including a radical industrial transformation towards a net zero waste system and a complete renewable energy transition; neither of these projects are proceeding at any pace globally [7]. In addition, the CE narrative promotes “green” consumption and growth through decoupling from resource use [1]. The idea of absolute decoupling growth from resource use is a welcome message for regions and countries where the idea of green growth is seen to be an answer to the environmental and developmental crisis of recent decades. However, the absolute decoupling of consumption and production from resource use and other limitations of the CE have been identified [8,9]. Other CE premises and promises are also debatable [10,11], in particular with respect to the CE contribution to sustainable development and a lack of focus on social development [12]. Critics find significant contradictions in the CE with strategies towards sufficiency and sustainability. While it is generally acknowledged that the CE has created a space for a discussion of waste and resource management [13,14], this space for discussion, however, needs to include a critical review of CE ambitions and limitations.

Particularly pressing at this stage is the consideration of the specific ambitions and challenges of the CE for developing and transitional economies in South Asia, such as Nepal. Given that the bulk of CE discussion to date has been on the richer industrialized north, there is a distinct lack of critical analysis of the benefits and challenges of the CE for Nepal, which this perspectives paper begins to address by discussing the broad scholarly and professional literature over the last five years.

The structure of the paper focuses first on current limitations to the mainstream CE narrative in contrast to more holistic sustainable alternatives globally in Europe and in the South Asia region. The following section then briefly discusses Nepal’s future development ambitions, raising the question as to whether the CE is the appropriate vehicle for change. Then, the main body of the article—a critical literature review—takes a close look at the existing literature and discussions around the CE in Nepal for its green and inclusive growth strategy and SDG goals for 2030. In this main section, we question the claims to leadership of the EU as well as looking at sectoral claims for the CE in Nepal. The final discussion section examines current claims in relation to the existing literature and raises questions about the uncritical approach to the CE currently in fashion in Nepal. The conclusion then proposes a revised approach to circularity in Nepal consistent with its strengths and limitations.

2. Holistic CE Vision of Change and Reality Check

In a recent blog post for The Economist, Gillian Parker suggests that the circular economy narrative needs a reality check [15]. In other words, there is a need to assess the gap between the rhetorical claims and practical outcomes.

In addition to the issues identified above, the annual Circular Gap Report sees a contrast between the significant rhetorical success of the CE and the decreasing annual percentage of the global economy being circular based on material footprint analysis (MFA) [7]. In Australia, for example, where the circular economy has been in the media since 2018, the national science agency CSIRO recently reported the dismal material flow analysis of the country, which at 4% is approximately half the (declining) global average [16]. Secondly, the aspirational rhetoric of the CE is contrasted with a reductive application focused largely on waste, while social aspects of more inclusive development are marginalized [17]. Thus, there is growing evidence that implementation to date globally addresses end-of-pipe symptoms (waste and recycling) rather than encouraging systemic change [18].

Thirdly, in the one country where the CE appears to have had more than rhetorical success, the Netherlands [19], this has come through a set of policies at the city level that goes beyond the mainstream circular discourse to include, for example, a reformed capitalism model in Doughnut economics, which proposes that environmental thresholds should dictate how development proceeds and that social needs and equity should be the objective of the economy rather than growth per se [20,21,22]. Fourthly, claims by advocates that the CE protects against environmental loss such as biodiversity are not born from actual theory and policy for the CE [23]. Finally, there is significant ambiguity around the actual meaning and scope of the term [24]. Although rarely acknowledged in the mainstream, different “circular” discourses compete to define this space in ways that both perpetuate and challenge mainstream growth models [25]. Thus, the diversity, contradictions, and ambiguities in the CE tend to feature only marginally in mainstream discussions.

As noted, to date, the main implementation of the CE globally has been focused on end-of-pipe waste and recycling strategies, which are insufficient for the cleaner production and consumption models imagined by the model and its more robust precursor—industrial ecology [26]. Achieving higher-level reuse and reduction patterns involves a complex systemic redesign of the economy, which few countries have an appetite for given their economic growth ambitions [27]. In addition, the implications of a shift from private ownership to sharing economies through the CE entails a social and economic transformation that is not theorized or discussed in the mainstream story. Such a transformation is discussed in reformative accounts such as models of a sustainable circular economy and society [28].

From Europe in particular, a key partner for Nepal, there is evidence of the holistic discourse about a green economy, but there is a dichotomy between words and actions, since policies focused on “end of pipe” solutions do not address the socio-ecological implications of a zero-waste consumption and production society through a circularity transition [29]. As the circular economy moves from industrialized nations in Europe and elsewhere to less developed nations, a question is whether the modest implementation of the CE is the appropriate vehicle for future socially inclusive development [30].This is particularly pertinent for South Asia and Nepal—the country of focus in this review.

The recent Asian Development Bank (ADB) multi-authored report on circular economy opportunities for South Asia highlights many positive and negative trends, including the need for regional cooperation, growing consumption trends, and the need for a limited initial focus on 3R and waste management [31]. In a recent study of the CE in neighboring Bangladesh, due to poor stakeholder knowledge, policies, finance, and also corruption, the CE remains marginal [32]. Thus, these and other considerations discussed above regarding the feasibility and scope of the claims for the circular economy need to be considered by countries such as Nepal.

3. Sustainable Circular Economy for Nepal’s Development Ambitions?

For a developing country such as Nepal, with ambitions for growth through industrialization to middle-income status by 2030 [33], key to-date unanswered questions for CE advocates are what the CE means, how it can be promoted, and to what extent the CE is the vehicle for future development. Although not universally shared [34,35], the majority of discussions about the circular economy in Nepal assume a mainstream growth path to manufacturing and industrialization is essential. However, any proposed circular agenda in Nepal must respond to inclusive and resilient responses to future climate change [36] and better integration of the informal sector, who play a central role in waste collection [37].

Given that there is only a scattered reference to the social benefits of the CE [38], Nepal requires at least a modified CE narrative, which emphasizes the social dimensions of change [28,39]. In fact, some CE critics detect in the mainstream narrative an attempt by business to depoliticize the different social and environmental crises globally, exacerbated by uneven growth and development [40]. Whether or not this is the case in Nepal is unclear, but one of the main causes of uneven development in Nepal has been widely acknowledged political instabilities and poor coordination between national, federal, and local governments to deliver stable and locally relevant solutions [41,42]. In such a context, the proposal that a resource efficiency model such as the circular economy is the answer to future sectoral and national development seems exaggerated.

This study sought to understand current formulations of the circular economy for Nepal in the broad literature with a critical assessment in relation to Nepal’s SDG, climate action and green growth ambitions. Given the limited scholarly literature, a broader range of reports and discussions were included in the critical literature review. More specifics about the review process are noted below.

4. Materials and Methods: A Critical Literature Review

In addition to the broad scholarly gray literature and forum discussions of experts, other channels report a range of activities in Nepal around the circular economy. These include newspaper articles and projects initiated by different agencies, e.g., Ref. [43]. These sources document a growing interest in the topic but tend to repeat mainstream claims about the CE. At this early stage of the discussion of the CE in Nepal, it was decided for this perspectives paper not to proceed with a study using the PRISMA protocol (protocols—PRISMA statement) given the paucity of studies and modest uncritical quality of work to date. The author’s hope is that this current work might encourage others in the future to undertake such a study when a sufficient body of the literature is available.

Sources included were research articles, policies and strategies, the gray literature, theses, conferences, and forum discussions (where recordings were available). Similarly to an integrative review, the review includes diverse sources [44]. As already noted, existing sources almost without exception do not take a critical approach to the circular economy, although they do discuss policy, business, and other changes necessary in Nepal. The broader literature referred to here specifically included theses, e.g., Ref. [45], reports, e.g., Ref. [46], preprints, e.g., Ref. [47], conference papers, e.g., Ref. [48], as well as refereed research articles. A Google Scholar, web of Science, and Pro quest search using the keywords Nepal AND circular economy was conducted on 14.08.24. Incidental references to the CE (once or twice) in documents clearly on other topics were then excluded, e.g., Ref. [49]. We also referenced recent recorded forum discussions on the CE in Nepal [50,51]. Broad thematic headings relevant to the discussion of future directions for Nepal consistent with the perspectives paper focus were agreed upon among the author team.

In the final selection of papers which discuss the CE substantively for Nepal were the following:

• Acharya, G. D. (2023) [52]
• Alqassimi, O., and Upadhayay, S. (2019) [53]
• Aryal, C. (2020) [54]
• Bhattarai, S. K, et al. (2021) [55]
• Dhungana, B., et al. (2022) [56]
• Impact Hub Kathmandu. (2024) [46]
• Jha, N. K., et al. (2024) [57]
• Khanal, N., and Thapa, S. (2023) [58]
• Labra Cataldo, N., et al. (2024) [37]
• Parajuly, K. (2019) [48]
• Shreshta, Z. (2017) [49]
• Suram, D. (2020) [45]
• Tuladar, A. (2017) [59]

Given the modest number and quality of the papers listed above, the discussion below includes other sources which are directly relevant to the CE proposal for Nepal.

4.1. CE in the Context of Nepal’s Development Green and Inclusive Growth Ambitions

Existing discussions and the literature on the CE for Nepal, which is largely sectoral to date, see the approach as the answer to many of Nepal’s development goals. Thus, the CE is “an operational framework and paradigm for sustainable development” [55] (p. 144) with “no net effect on the environment” [55] (p. 43). Such high level expectations in a climate where the circular agenda is limited to recycling and waste initiatives seems beyond scope.

Resource efficiencies and waste management through circular economy projects may contribute to future development in the region but hardly answer all sectoral ambitions, particularly where the CE and sustainable development have an at best unclear and even antagonistic relationship [12,39,60]. In specific areas in Nepal, such as the Himalayas, where climate-resilient and inclusive development is critical and sustainable livelihoods and tourism are essential, there are many barriers to equitable development and opportunity [61].

In the raft of policies and strategies for Nepal’s future, including their net zero ambition for 2045, the growth agenda towards middle-income status by 2030, and the green and resilient inclusive development (GRID) agenda, the circular economy features as one of many strategies. With support from EU and UK partners, circular economy strategies in Nepal have been set in a context of green growth. The Global Green Growth Institute (GGGI) Report on Nepal’s green growth potential in 2017 and shared directly with the government clearly has influenced directions in the country [62].

The adoption by Nepal in 2021 of the Green, Resilient, and Inclusive Development Strategy and Action Plan (GRID-SAP) for Sustainable Recovery, Growth, and Jobs and access to funding from numerous EU and Asia partners, including the World Bank, was a response to this idea. Also in its submission to the UNFCCC (United Nations Framework Convention for Climate Change) about Nepal’s ambition to achieve net zero by 2045, the circular economy is mentioned (once) as one of several strategies to achieve this goal [63].

As already noted in the recent World Bank Country Climate and Development Report for Nepal, there is a need for adaptation and resilience strategies to combat future climate change effects, and a path to decarbonization is essential for the country [36]. In line with the adoption by governments and multiple partners in 2021 of the Green, Resilient and Inclusive (GRID) approach, the report recommends an integrated approach to water, agriculture and forestry, hydropower, sustainable urbanization, and transport connectivity resilient to climate change. Finance, social protection, and better (local and federal) governance are seen to be enablers here; the CE is only mentioned once as one decarbonization strategy in line with the GRID policy, and this is consistent with the minor role the CE can play in overall development policy and practice in Nepal.

In their recent report prepared for the 11th Regional 3R and Circular Economy Forum in Asia and the Pacific, the Nepal government highlighted the limited success of the CE waste and recycling initiative to date as a response to GRID-SAP [64]. Baniya et al., noting that green growth until recently has not been an engine of change in Nepal, argue that technological changes in the energy sector and an absolute reduction in consumption and materials are the way forward for Nepal [33]. Consumption reduction conflicts in part with the circular economy, which has an unclear position on and may drive increased consumption [65].

Thus, given such a broad ranging social, technological, and political agenda for Nepal, what might be the role of a resource efficiency strategy such as circular economy? As recommended by a number of scholars, is it time to shift the general CE narrative back to a connection with sustainable development goals through a reformed growth agenda such as promoted by a sustainable circular economy and society [28,39]? How are these issues reflected in the recent scholarly and expert discussion and debate on the circular economy in Nepal?

4.2. EU Leadership for Nepal?

There have been several forums organized on the circular economy in Nepal in collaboration with the EU or the German government; thus, the Nepal Economic Forum (NEF) organized a discussion on the circular economy (CE) in 2019 focused on the Himalayas [50], and this was followed by a circular economy-focused section in the NEF annual economic report [66]. This discussion and report section was based on perspectives from industry sector representatives and highlighted the potential and existing challenges for creating an enabling environment for the CE in which economic growth and environmental protection are achieved. In the recorded discussion, NEF speakers discuss the need for new policies and the need for incentives and greater understanding towards the CE [67].

Speakers came from a range of organizations, including the WWF; think tanks and energy concerns [68] take a positive approach to some of the claims of the circular economy but point to the need for a focus on affordable and accessible renewable energy, better integrated planning, the need for a local approach, including a through better implementation of federalism, and an inclusive approach that focuses on a just transition. Two of the four discussants directly referred to a history of circular approaches to waste and recycling predating the recent enthusiasm for the CE. Thus, the discussion focused on inclusion, governance, and taking advantage of a history of resource efficiency in Nepal, and discussions treat the circular narrative as requiring a set of prior developments and changes in the social, energy, and waste sectors. Since the 2019 NEF meeting, the Himalayan Circular Economy Forum, HCEF, has conducted two further meetings for the region on this topic in 2022 and 2023.

The Switch-Asia circular economy platform brings the EU and Nepal together to develop pilot projects. In their recorded forum discussion of 2021 [69], the Switch-Asia panel addresses the current challenges of the circular economy for Nepal building on EU leadership through its green deal. The Switch-Asia program for Nepal more generally has been addressing sustainability, development, and circular economy issues for Nepal since 2018. The discussion made clear that behind the lack of progress in Nepal, especially on waste, is lack of policy, regulation, growing consumption trends, limited incentives for businesses to adopt circularity, and problems with packaging. The premise of the Switch-Asia program is that the EU commitment to the circular economy in its new Green Deal and Circular Action Plan is an example from which Nepal can learn.

However, current analyses of CE implementation suggest the EU circular action plan (2019) has promoted a holistic vision but delivered end-of-pipe solutions [29] especially focused on recycling and non-systematic transformation. Hence, some argue that the plan and focus hinder rather than encourage the system change it promises [70]. In a recent opinion piece, Johannsen [71] suggests that while the circular economy action plan shows an understanding of the broader socio-economic constraints beyond efficiency measures, it shows no real transition from the linear economy because increased resource extraction is encouraged into the future. In a recent book-length treatment, the clear lack of progress towards circularity, as also reflected in country-specific reports in Europe, is discussed in detail also [72]. Hence, it would seem prudent for Nepal to consider whether the EU is the appropriate example to follow.

4.3. Agro-Food Sector

One sector where there has been recent discussion of the potential impact of the circular economy is the agri-food sector in Nepal. Acharya [52] observes that there has been no substantive discussion of CE in Nepal and that the approach must be matched to agroecological principles to work effectively. The fact that CE alone is insufficient for sector transformation is an insight that is relevant to other areas and lacking in the existing discussions. Many of the so-called circular initiatives in this area are examples of existing approaches to sustainable agriculture, and the articles addressing this issue hesitate between using sustainable agriculture and circular economy as the relevant term. This literature treats circular agriculture as a given and is key to transforming Nepal’s agri-food system. Thus, Ritika et al. [73] see multiple livelihood, economic, and environmental benefits for the Himalayas region in taking a circular approach to fruit production in the region.

In a recent paper on an endogenous agri-food system as the paradigm of choice for sustainable agriculture in Nepal, the circular economy is mentioned several times as the agro-ecology approach of choice [58]. The paper discusses a range of strategies to reverse the ills of industrial agriculture for Nepal, including soil health management, climate change-adapted planting of crops, etc. The fact that the reader is assumed to know how this discussion relates to the CE is perhaps indicative of other papers, which also assume but do not discuss what the CE is and what it brings to the sector.

A shift from a linear to a circular economy in this sector would also focus on energy generation from waste such as a biogas-based circular system fed by household waste. In their discussion, Dhungana et al. [56] focus on relevant substrates for the best biogas production for a circular economy and multiple SDGs. In this paper, the circular economy and bio-economy are treated as relatively synonymous, although the former (CE) is a strategy for the latter [57,74]. The assumption that biogas production will solve multiple waste issues and simultaneously create a circular economy addressing multiple SDGs is again reiterated at the end of the paper.

Bhattarai et al. [55] describe the circular economy in agriculture as an approach that uses minimal external inputs, closes nutrient loops, and discharges to the environment. These are all existing concepts and concerns in sustainable agriculture discussions. At the conclusion of their paper, the authors lament the lack of interest in policy and practice towards circular agriculture in Nepal. They do not consider that this might be because, as noted above, circular agriculture is a label that brings nothing new to discussions of sustainable agriculture, where existing policy and practice is addressing the same concerns, e.g., through conservation agriculture [75,76].

4.4. Waste Management

Waste management is by far the most popular avenue for circular implementation in Nepal. Given the low rates of waste recovery of around 4% until recent waste recycling and energy generation, electricity and biogas from waste (especially MSW) have dominated discussions of the circular economy in Nepal. Parajuly suggests that the growing waste problem in Nepal requires more local knowledge and solutions, policies rather than ineffective regulations, and better coordination among the different actors in the waste system [48]. The author argues that unless these aspects are addressed, business innovations of the kind being proposed elsewhere will not happen.

An integrated approach to collection, recycling, and reuse of MSW is viewed by Subedi et al. [77] as a key circular challenge and opportunity for Nepal. Another key issue, which has emerged in discussions, is the role of the informal sector in collecting waste and the potential to meaningfully bring them to participate in this new opportunity. This was also a key issue raised by recycling experts in various forum discussions. This discussion around a just transition and social concerns has a strong focus on the social setup of circularity in Nepal—a weak area in the mainstream discussion.

Among the many challenges of waste management for the CE, plastic waste in Nepal is one of the many challenging waste streams [37,78]. Plastic waste has been another recent CE focus in the region and Nepal [79], and projects through the Partnership for Sustainable Development (PSD) Nepal https://www.psdnepal.org/ are focusing on the recovery of PET plastics and upcycling in the Himalayan region as a contribution to the circular economy. Another EU-funded project Creasion (https://creasion.org/) is also promoting plastic recovery. Other kinds of plastics are often exported illegally to India, as Cataldo et al. note [37]. Initiatives supported by the UNDP include brick production with plastic waste incorporated. These projects and discussions see the recovery and reuse of plastics as part of a circular economy, but whether they are more symptomatic responses to a deeper crisis, in general, is debated. In her review, Mah concludes however that “corporations across the petrochemical value chain have banded together to contain the circular economy policy agenda, appearing to be sustainable while proliferating unsustainable markets” [1].

Following the lead of other nations, Nepal has developed a Solid Wastes Management National Policy [80], which has been associated with the circular economy. These tactics encourage resource efficiency, reuse, and recycling while reducing the usage of new materials. Additionally, the government has started several initiatives to advance the circular economy, including the USAID co-funded Karnali Waste Management Program (https://www.usaid.gov/nepal/fact-sheets/usaid-karnali-water (accessed on 15 August 2024)). Nepal has several established recycling platforms, including Doko recyclers (https://dokorecyclers.com/), who associate their objectives with the CE.

4.5. Business and Innovation

In their small survey study of the perceptions of CE implementation in Nepal and the USA, Alquassimi and Upadhayay [53] found awareness of the CE in both countries limited to 3R. Respondents from both countries noted limited business and organizational activity in the CE and no reporting on circular economy outcomes among businesses. The authors conclude that more awareness activities are needed and make several suggestions for policy change. On the significance of collaboration among stakeholders and businesses, compared to Nepal, more collaboration was noted by USA respondents as essential.

Using survey data from a sample of SME managers in Nepal (n = 152), Baah et al. [81] investigated whether circular economy entrepreneurship (CEE) drove technical capabilities in the circular economy. They found inter alia that the dynamic nature of the business environment for relevant SMEs had a strong effect on CEE. The sample was from managers identifying as using circular principles across multiple sectors. Most interesting from this study is that such a sample was self-identifying as using circular and resource efficiency approaches, while the fact that entrepreneurship drives technical capabilities is perhaps less surprising.

Recently, the (four-year) Roots of Circularity project (https://kathmandu.impacthub.net/roc-project-pioneering-nepals-circular-shift/) initiated by several partners aims to promote circularity in two provinces in Nepal. Its recent scoping report notes multiple policy and practical obstacles to making progress while simultaneously supporting new initiatives and start-ups [46].

4.6. Sustainable Tourism

In his master’s thesis, Surnam suggests there is great potential for circular approaches in tourism in Nepal, but current knowledge and practices are limited [45]. Waste management strategies involving locals and more digital solutions, e.g., to trekking passes, are some of the actions suggested. Tourism operators, while they wish to provide eco-friendly solutions, are also driven by basic business needs to respond to an international market that has a mixed approach to such considerations. Aryal [54] likewise sees great potential for the circular economy in tourism and laments the lack of knowledge and business and government interest to date in Nepal. Waste reduction, recycling, reuse, and redesign are suggested as the CE strategies, which should be deployed.

5. Discussion

The sectoral and general discussions of the CE for Nepal above are not an exhaustive list of projects and initiatives currently being developed. However, those discussed suggest a level of enthusiasm in Nepal for the CE, albeit not yet embedded in a critical discussion of how such activities contribute to sustainable development objectives. In general, the discussions about the CE focus on waste and recycling and raise questions relative to Nepal’s development trajectory, including that the assumption of benefits from the CE for Nepal’s development ambitions to date is poorly theorized and uncritically discussed and ignores existing sectoral strategies and policies. Resource efficiencies such as those promoted by the circular economy as a driver of green growth are far from adequate to the wide-ranging socio-economic and political agenda required for this transformation.

First, there is an implicit assumption, albeit contested, that Nepal will follow the standard path of industrialization that other countries have, i.e., becoming a successful manufacturing and industrial nation along the lines of other countries [34,35,36]. However, the associated consumption and production costs of growth will increase the existing challenges for waste, packaging, and so forth [65]. Second, the assumption that the EU model and policies are to be emulated in Nepal is questionable based on the poor performance of that jurisdiction (EU) to date [2,15,29]. Third, there are governance and institutional challenges of development for Nepal, including with respect to inclusive development and a stable government and a weak federal system that suggest more work on the institutional framework should precede any focus on resource efficiencies [32,33,34,41]. Fourthly, the CE discussion bypass existing sectoral strategies, such as the conservation agriculture already in place in Nepal [61,75,76], as if they do not exist. Finally, there is an unclear link between the future climate change-related development challenges as outlined in the WB report and the role of circularity in the country [34,36,42].

The re-emergence of the circular economy as the answer to waste and resource issues in highly developed countries is a product of increased consumption practices. While Nepal‘s future development requires greater political stability, institutional change, and coordination across multiple levels of government, mainstream CE discourse is becoming the new term to describe Nepal’s future sustainable development. However, the claim that resource efficiencies in circular business, agriculture, tourism, and other sectors can address structural development issues seems premature. While it is important to better manage waste and resources through r-strategies, the belief that the CE will solve Nepal’s socio-economic objectives seems an unrealistic aim. As suggested by other scholars, a revised agenda of an inclusive and sustainable circular economy adapted to Nepal’s needs is needed [28,30].

6. Conclusions

Globally, in addition to vague definitions [82], there is no evidence of absolute decoupling at scale globally [83], and for the CE, there is no progress on the reduction in material footprint [7]; with the unabated increase in GHGs and climate change, governments and businesses globally continue to promote the circular economy. Other scholars have responded with a revision of the mainstream concept and discourse on the definition of a sustainable circular economy and society [25,28,39]. Such a model foregrounds social and ecological considerations and does not assume that closed-loop technical innovation will or can drive sustainable development. We suggest that such a model is a more appropriate framework for Nepal.

One key area where there has been limited comments and discussion to date is the need to develop circular business models that will allow for deeper engagement with the transformation of the business sector. The recent scoping study from the Impact Hub Kathmandu project aims to establish the barriers and challenges in two provinces, and this study indicates multiple business challenges in coordinating businesses and achieving government support [84]. The success of such initiatives will require significant collaboration among stakeholder businesses to enable more closed-looped production and resource management [59].

Similarly to other countries in the region, Nepal has recently developed a strategy for green growth within which waste management and the circular economy are playing a key role [33]. International partners, especially from the EU, national government, and non-government organizations, including the Nepal Economic Forum (NEF), have been influencing this commitment. This mainstream CE techno-social discourse fits squarely in the green growth model and promises to deliver economic benefits and growth while delivering environmental protection and regeneration [10,11,62,74]. Judging by the literature and discussions to date, the approach to the CE in Nepal has been a largely uncritical adoption of the mainstream narrative.

The focus of current discussions in the modest literature and forums on the topic has centered around waste management and recycling, with some focus on business opportunities. The holistic vision of a zero-waste consumption and production system, as claimed by the CE, is nowhere to be seen globally and plagued by multiple practical obstacles. Recent recycling and circular projects in Nepal remain limited in scope and number. In its absence, individual strategies such as biogas generation from anaerobic digestion are re-labeled as circular economy strategies. Evidence from this review reveals that a longstanding history of resource efficiency and sustainability in Nepal, especially in the agricultural sector, is being hijacked and bypassed by the CE narrative.

What is the way forward? As demonstrated by existing material footprint assessments of the progress of the CE globally, a few of the highly developed industrialized countries have created the systemic change required for circularity to be an essential part of current economic and social development. Hence, how likely is it that Nepal can succeed where other far better resourced countries have failed? Nepal currently faces longstanding challenges to a more inclusive and sustainable society, as already discussed above. Consistent with these challenges, the adoption of a broader more reformative program such as the sustainable circular economy is more appropriate. Addressing current challenges to create a socio-economic environment conducive to inclusiveness and development will help the future uptake of resource efficiency strategies such as the CE to offset growth-inspired consumption and waste generation.