How Do Industrial Ecology, Energy Efficiency, and Waste Recycling Technology (Circular Economy) Fit into China’s Plan to Protect the Environment? Up to Speed

Abstract

The challenges of environmental protection are especially prevalent in South and Southeast Asian nations, which adversely affects their sustainable developmental goals. During the last two decades, increased industrialization and urbanization have caused massive air pollution, particularly in the most industrialized and densely populated countries. Due to China’s fast economic expansion and development, the demand for natural resources has increased, resulting in climate change, biodiversity loss, soil degradation, and environmental risks. China’s ecological footprint has been the subject of little investigation on the premises of a circular economy. This study used a literature review methodology on the critical key factors that hinder or facilitate the transition of a linear economy towards a circular economy. Further, based on the literature review, this study used industrial ecology, energy efficiency, and waste recycling technology factors to analyze the role of the circular economy on the country’s environmental sustainability agenda for the period of 1975–2020. The results show that in the short run, the link between ecological footprints and per capita income is monotonically decreasing; however, in the long run, the relationship is U-shaped. In both the short and long run, waste recycling technology and cleaner manufacturing significantly decrease ecological footprints. Renewable energy consumption increases ecological footprints in the short run but decreases them in the long run. The management of natural resources reduces ecological footprints to support the ‘resource blessing’ hypothesis. The Granger causality corroborated the unidirectional relationship between ecological footprints, oil rents, and urbanization and ecological footprints. In addition, economic growth Granger causes industrialization and waste recycling technology while green energy Granger causes economic growth, industrialization, and recycling technology. The two-way link between economic development and urbanization exists within a nation. The variance decomposition analysis (VDA) predicts that in the future, China’s natural resources, green energy demand, and technological spillover will limit its ecological footprint through material and technology efficiency.