Every year, millions of tons of materials are being exploited from the earth's crust, and processed into consumer and capital goods. After decades to centuries, most of these materials are "lost". With the exception of some pieces of art or religious relics, they are no longer engaged in the consumption process. Where are they? Recycling is only an intermediate solution for such materials, although it does prolong the residence time in the anthroposphere. For thermodynamic reasons, however, recycling cannot prevent the final need for an ultimate sink.
Fiscal efficiency is separate from economic efficiency. Economic analysis of recycling includes what economists call externalities, which are unpriced costs and benefits that accrue to individuals outside of private transactions. Examples include: decreased air pollution and greenhouse gases from incineration, reduced hazardous waste leaching from landfills, reduced energy consumption, and reduced waste and resource consumption, which leads to a reduction in environmentally damaging mining and timber activity. About 4,000 minerals are known, of these only a few hundred minerals in the world are relatively common. At current rates, current known reserves of phosphorus will be depleted in the next 50 to 100 years. Without mechanisms such as taxes or subsidies to internalize externalities, businesses will ignore them despite the costs imposed on society. To make such nonfiscal benefits economically relevant, advocates have pushed for legislative action to increase the demand for recycled materials. The United States Environmental Protection Agency (EPA) has concluded in favor of recycling, saying that recycling efforts reduced the country's carbon emissions by a net 49 million metric tonnes in 2005. In the United Kingdom, the Waste and Resources Action Programme stated that Great Britain's recycling efforts reduce CO2 emissions by 10–15 million tonnes a year. Recycling is more efficient in densely populated areas, as there are economies of scale involved.
The recycling of waste electrical and electronic equipment in India and China generates a significant amount of pollution. Informal recycling in an underground economy of these countries has generated an environmental and health disaster. High levels of lead (Pb), polybrominated diphenylethers (PBDEs), polychlorinated dioxins and furans, as well as polybrominated dioxins and furans (PCDD/Fs and PBDD/Fs) concentrated in the air, bottom ash, dust, soil, water and sediments in areas surrounding recycling sites. Critics also argue that while recycling may create jobs, they are often jobs with low wages and terrible working conditions. These jobs are sometimes considered to be make-work jobs that don't produce as much as the cost of wages to pay for those jobs. In areas without many environmental regulations and/or worker protections, jobs involved in recycling such as ship breaking can result in deplorable conditions for both workers and the surrounding communities.
Recycling of plastics is more difficult, as most programs can't reach the necessary level of quality. Recycling of PVC often results in downcycling of the material, which means only products of lower quality standard can be made with the recycled material. A new approach which allows an equal level of quality is the Vinyloop process. It was used after the London Olympics 2012 to fulfill the PVC Policy.
In the strictest sense, recycling of a material would produce a fresh supply of the same material—for example, used office paper would be converted into new office paper, or used foamed polystyrene into new polystyrene. However, this is often difficult or too expensive (compared with producing the same product from raw materials or other sources), so "recycling" of many products or materials involves their reuse in producing different materials (e.g., paperboard) instead. Another form of recycling is the salvage of certain materials from complex products, either due to their intrinsic value (e.g., lead from car batteries, or gold from computer components), or due to their hazardous nature (e.g., removal and reuse of mercury from various items). Critics dispute the net economic and environmental benefits of recycling over its costs, and suggest that proponents of recycling often make matters worse and suffer from confirmation bias. Specifically, critics argue that the costs and energy used in collection and transportation detract from (and outweigh) the costs and energy saved in the production process; also that the jobs produced by the recycling industry can be a poor trade for the jobs lost in logging, mining, and other industries associated with virgin production; and that materials such as paper pulp can only be recycled a few times before material degradation prevents further recycling. Proponents of recycling dispute each of these claims, and the validity of arguments from both sides has led to enduring controversy.