Purpose: The purpose of this paper is to evaluate how improvements in municipal solid waste management systems (MSWMS) can contribute to a transition toward circular economy (CE) in urban areas, outlining actions and guidelines for public policies. Design/methodology/approach: The research was carried out in three municipalities located in the state of São Paulo in terms of: diagnosis; elaboration of more positive scenarios in terms of CE and scaling of economic and environmental benefits; and outline actions and guidelines for public policies of MSWMS. Findings: In developing countries like Brazil, MSWMS can contribute to a transition toward a CE through new public policies and management practices, or even through the improvement of those that already exist. Examples of this are the integration of the informal sector of the recycling chain and service sector related to repairs of clothing, shoes, furniture and electronics as well as composting at the food production site. This could be strengthened by legal and financial mechanisms, training and carbon credit projects. Moreover, there is a need for integration of public policies between different levels of governments and sectoral policies. Originality/value: This paper developed a methodology to examine the potential for a transition toward a CE through the MSWMS in different scenarios and cities. This methodology allows to advance the implementation of the concept of CE in urban areas of developing countries and generating co-benefits to the local economy and the global environment.

Solid waste management (SWM) at the municipal level is challenging for developing countries. Typically, the service runs at an economic loss and is of low quality, with high environmental impacts. The research aimed to evaluate how budgetary and public policies may affect the quality of solid waste management in small municipalities from underdeveloped countries. This study reports the economic impact of the operational routine, legislation, taxes, and total SWM costs in a small municipality of Brazil (36,000 inhabitants). Eleven types of waste and related services were evaluated from 2017 to 2020. Results show that the SWM budget would have to increase from the current 3.64% of the annual city budget to 7.48% to supply this management's financial needs under a future scenario of full legislative compliance. The costs required for this compliance would increase expenses from US$ 29.09 to US$ 46.05 per inhabitant per year. Alternatives to solve or alleviate the problem are efficiency's continuous improvement, new types of fundraising, inter-municipal cooperation, and increased inspection, especially related to establishing the legal responsibilities for waste generators. A new fee could also be discussed since this municipality (as well as more than half of Brazilian cities) has no specific charge for SWM. A US$ 9.40 per inhabitant/year charge would cover the operational costs related to domestic solid waste.