Construction waste, accounting for up to one-third of global solid waste, presents substantial environmental and resource challenges. Rapid urbanization, intensive building activities, and heterogeneous waste streams exacerbate the problem, including hazardous materials such as asbestos and lead-based products. This paper evaluates the environmental impact of construction waste and examines reduction methods, highlighting biorecycling as the most effective and sustainable approach. Construction waste is categorized into inert, non-inert, and hazardous types to enable targeted management. The analysis reviews reduction techniques including design optimization, material efficiency, conventional recycling, and AI-enhanced biorecycling. Biorecycling methods, such as composting, anaerobic digestion, and vermicomposting, are optimized through Artificial Intelligence and Internet of Things (IoT) technologies, enabling real-time monitoring, predictive control of microbial activity, and improved waste segregation. The paper advocates for a combined strategy integrating traditional recycling with AI-driven biorecycling to maximize waste reduction, promote circular economy principles, and enhance sustainability in the construction sector.