Waste causes environmental pollution and greenhouse gas (GHG) emissions when it is not managed sustainably. In Bangladesh, municipal organic waste (MOW) is partially collected and landfilled. Thus, it causes deterioration of the environment urging a recycle-oriented waste management system. In this study, we propose a waste management system through pyrolysis of selective MOW for biochar production and composting of the remainder with biochar as an additive. We estimated the carbon (C), nitrogen (N), phosphorus (P) and potassium (K) recycling potentials in the new techniques of waste management. Waste generation of a city was calculated using population density and per capita waste generation rate (PWGR). Two indicators of economic development, i.e., gross domestic product (GDP) and per capita gross national income (GNI) were used to adopt PWGR with a projected contribution of 5–20% to waste generation. The projected PWGR was then validated with a survey. The waste generation from urban areas of Bangladesh in 2016 was estimated between 15,507 and 15,888 t day−1 with a large share (∼75%) of organic waste. Adoption of the proposed system could produce 3936 t day−1 biochar blended compost with an annual return of US $210 million in 2016 while it could reduce GHG emission substantially (−503 CO2 e t−1 municipal waste). Moreover, the proposed system would able to recover ∼46%, 54%, 54% and 61% of total C, N, P and K content in the initial waste, respectively. We also provide a projection of waste generation and nutrient recycling potentials for the year 2035. The proposed method could be a self-sustaining policy option for waste management as it would generate ∼US$51 from each tonne of waste. Moreover, a significant amount of nutrients can be recycled to agriculture while contributing to the reduction in environmental pollution and GHG emission.