Circular Economy and Pollution Management

Pollution is a major barrier to development - damaging health, constraining economic growth, degrading ecosystems, deepening poverty and inequality, and significantly contributing to climate change. Industrialization, agrochemical use, urbanization, forest fires, burning biomass for residential heating and cooking, and poor waste management have intensified environmental health risks, especially in low- and middle-income countries. The most vulnerable populations, least able to protect themselves, bear the greatest burden.

Exposure to air and water pollution, hazardous chemicals, and toxic wastes such as mercury, lead, and persistent organic pollutants (POPs) causes debilitating and fatal illnesses, premature deaths, and ecosystem loss. Pollution, from all sources, is now the largest environmental cause of disease and early mortality, killing more people each year than AIDS, tuberculosis, and malaria combined.  

Poor outdoor air quality is now the second-leading cause of premature death worldwide after cardiovascular disease. Recent World Bank analysis estimated that 2.3 billion people are exposed to outdoor fine particulate matter (PM2.5) levels above 35 µg/m³, resulting in more than 5.7 million deaths annually and economic costs approaching 5% of global GDP. Even with current policies, exposure is projected to rise by 15% over the next 15 years due to population and economic growth. 

Chemical pollution is equally devastating. In 2019, lead exposure caused an estimated 5.5 million deaths from cardiovascular disease, 90% of them in low- and middle-income countries. In the same year, children under five lost 765 million IQ points globally, undermining education outcomes and human capital. The global economic cost of lead exposure alone is estimated at $6 trillion annually, or nearly 6.9% of global GDP. 

At the same time, the intensive consumption of materials fuels these risks. Each year, more than 100 billion tons of raw materials enter the global economy, with waste projected to reach 3.4 billion tons by 2050. These linear production and consumption patterns deplete natural resources and generate harmful impacts across the entire product lifecycle. 

Addressing pollution at its source is an opportunity to drive economic growth, strengthen resource efficiency, and create new jobs. Effective pollution management offers solutions that can reduce poverty, boost shared prosperity, and deliver healthier and more productive lives for millions of people.

Last Updated: Oct 10, 2025

The World Bank supports developing countries in reducing pollution, promoting cleaner production, and fostering a circular economy (a systemic approach to economic development that is restorative and regenerative by design) for healthier lives and better livelihood opportunities. The Bank provides technical assistance, financing, and knowledge products that cover:

• promoting environmental sustainability through a circular economy, cleaner production and pollution prevention; 

• strengthening environmental institutions by helping countries improve pollution and chemicals management, environmental governance, regulation, and enforcement;

• improving air quality through the reduction of air pollution; 

• improving water quality, both in freshwater and in the ocean;

• integrating management of waste, including hazardous waste management with a holistic approach that manages waste from generation and collection to treatment, recycling, and final disposal;

• considering remediation of contaminated sites to mitigate the negative effects from inadequate legacy industrial and waste management activities;

• reducing short-lived pollutants; 

• disclosing environmental information for effective public participation in environmental management and sustainable economic development;

• sound management of chemicals, toxic materials, polluted lands, and the implementation of the Global Framework on Chemicals; 

• marine litter management - working on stopping leakages through improved waste management and reductions in the upstream production of waste, including  single-use plastics.

• creating new environmental markets, industries, jobs and opportunities to learn new skills.  

Analytical work

Working jointly with client countries, the Bank also carries out analytical work to identify environmental priorities for poverty alleviation, with a focus on low and middle-income countries. Recent analytical work conducted by the Bank identified cost-effective approaches to address outdoor air pollution . Another study addressed opportunities and challenges for air quality data gaps. Other analytical work has assessed the performance of satellites for air quality measurements, as well as the health implications of exposure to natural dust and chemical constituents and sources of fine particulate matter. In addition, interventions for reducing air pollution have been developed along with work that addresses the linkages between pollution, health, climate change and fiscal solutions.

By identifying the categories of environmental degradation that are more closely linked with poverty reduction and economic growth, analytical work has also been instrumental to help set environmental priorities. For example, this approach has been applied in Yucatan (Mexico), and Lao PDR, where analytical work has informed investments, policy reforms, and capacity building interventions to address environmental priorities. 

Last Updated: Oct 10, 2025

Air quality

With support from the World Bank’s loans totaling $1 billion for Innovative Financing for Air Pollution Control and Hebei Air Pollution Prevention and Control, the concentration of PM2.5 was reduced by nearly 40 percent across the Hebei province of China between 2013 and 2017, and the use of clean heating reduced annual carbon dioxide emissions by six million tons, equivalent to taking 1.2 million gasoline passenger vehicles off the road per year.

Over the last five decades, the World Bank has provided nearly $4.4 billion in financing to the Mexico City Metropolitan Area for projects spanning air quality management, transportation, energy, and other sectors – contributing to decreases in particulate matter pollution by more than 70% during this period. As part of this assistance, the Mexico Environmental Sustainability and Urban Resilience Development Policy Finance supported policy reforms to standardize air quality monitoring, measurement, and communication to the public about air pollution-related health risks in cities and the actions they can take to reduce their exposure to such risks.

Water pollution 

The Bank is assisting Argentina with an ambitious integrated plan for the cleanup and sustainable development of the Matanza-Riachuelo River basin. The project is building a large wastewater collector on the left bank of the Riachuelo River, which will transport sewage to different treatment plants, thereby avoiding direct discharge into the river. The project is also constructing an 11.5-kilometer outfall that will lead to Río de la Plata. Additionally, the Integral Sanitation Plan will expand and/or build several treatment plants throughout the basin and construct waterfall aeration stations. These large-scale engineering works are crucial for the health of 7 million people living in the area, at least 10 percent of whom live below the national poverty line.

In Romania, under the World Bank-supported Integrated Nutrient Pollution Control Project rural communities around the country are being equipped with essential tools needed to improve livestock manure management and prevent nitrates and other dangerous minerals from contaminating Romania’s soil and water supplies.

Management of Land-based Pollution and Remediation of Hazardous Waste Sites

The Montenegro Industrial Waste Management and Cleanup Project is helping to remediate industrial waste disposal sites and ensure that hazardous waste from industries is disposed in compliance with Montenegrin and European Union legislation.  The project supports strengthening of the regulatory framework and development of infrastructure to provide environmentally acceptable solutions for waste management. 

In Pakistan the Bank is financing a green growth project in Punjab that has included the implementation of waste management interventions. The project is supporting reforms to modernize the legal and regulatory framework and promote investments in cleaner technologies at the provincial level to reduce air and water pollution from sectors such as brick making and leather tanning.

A new, US$50 million GEF funded World Bank led global program supports the elimination of polychlorinated biphenyls (PCB) from the electricity sector. The program, implemented by several GEF agencies, helps countries meet the Stockholm Convention target to eliminate PCB while encouraging the replacement of contaminated transformers to achieve greater energy efficiency and reduce greenhouse gas emissions.

Last Updated: Oct 10, 2025