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But be careful, it will erase all your inventory. Put everything you want to keep in a box.
You don't. Dealing with waste & overproduction is a core part of the game.
There are several recycling-type recipes - as an example, once you are done with the hewn logs you made your house out of because you have upgraded to lumber, you can turn those hewn logs into charcoal (at the kiln) or wood pulp and then boards (at the carpenter's table and then the sawmill). The tooltip for any item will show you what recipes it can be used in. You can also just drop backpack-type things on the ground by dragging them to the trashcan icon that shows up to the right of your hotbar while you have an item on your cursor, and they will turn into either compost or garbage over about 12 hours (organic stuff mostly turns into compost, while everything else turns into garbage). Compost is used in several recipes, and garbage can be incinerated at the blast furnace to turn it into dirt.
Some specific things like Tailings deliberately have nothing you can do with them. For those items, you will need to find a place to store them permanently (usually deep underground, so they don't cause pollution).