The major purpose of this paper is (1) to find out the criteria for voluntary recycling by a for-profit recycler and for state intervention with recycling for a particular recyclable waste, (2) to present mod-els to determine the private and social optimal recycling rates respectively, and (3) to determine optimal implementation policy by providing economic incentives to motivate recycling. The results of the analysis conclude that (1) an increase in conversion efficiency, the price of secondary material, and carbon taxes will lead to an increase in recycling rates, (2) the subsidy based on secondary material recovered will result in a higher recycling rate and will improve recovery technology more than a subsidy for recyclable wastes collected and sorted.