Regional Pathways to the Circular Economy: A Comparative Assessment of Bio-based and Technology-driven Transitions in Bihar and Karnataka, India.

Abstract

The circular economy has emerged as a central strategy for achieving resource efficiency, climate resilience, and sustainable development. However, existing research has focused predominantly on national economies or industrial sectors, providing limited understanding of how circular economy transitions vary across subnational regions with contrasting resource endowments, production structures, and institutional capacities. Addressing this gap, this study develops a Regional Circular Economy Transition Framework (RCETF) to examine alternative regional pathways towards circularity through a comparative analysis of Bihar and Karnataka, representing bio-based and technology-driven development trajectories, respectively.

The study constructs a multidimensional Regional Circular Economy Index (RCEI) encompassing six dimensions: resource productivity, circular resource utilization, waste management, renewable energy, innovation and institutional capacity, and socio-economic outcomes. Using secondary data from official national and state statistical sources, the analysis integrates composite index construction, multivariate regression modelling, scenario analysis to 2050, and robustness diagnostics to evaluate regional performance, identify key drivers, and assess alternative transition pathways.

The results reveal substantial regional heterogeneity in circular economy performance. Karnataka currently outperforms Bihar owing to stronger innovation systems, industrial diversification, renewable energy deployment, and institutional capacity, whereas Bihar possesses considerable unrealized potential based on abundant biomass resources and opportunities for bio-based industrial development. Regression results identify innovation, renewable energy, governance quality, human capital, and industrialization as the principal determinants of regional circular economy performance, indicating that institutional and technological capabilities are more influential than resource endowment alone. Scenario projections further suggest that place-based policy interventions could substantially narrow regional disparities by 2050 through investments aligned with regional comparative advantages.

The study makes three principal contributions. First, it advances circular economy theory by demonstrating that regional circularity is achieved through multiple, context-specific pathways rather than a single universal model. Second, it introduces the RCETF and RCEI as transferable frameworks for analysing subnational circular economy transitions in heterogeneous economies. Third, it provides empirical evidence that differentiated, place-based policy strategies outperform uniform national approaches in promoting structural transformation, inclusive green growth, and long-term sustainability. These findings offer a scalable framework for designing regional circular economy policies in India and other emerging economies.