If you want a tree for the holiday, the experts at Grist and TreeHugger say it's actually better to buy a cut real Christmas tree than an artificial tree. Yippee, now we can march thru the tree lot with our heads held high!
Fake trees are made of polyvinyl chloride (PVC). Producing this type of plastic creates a lot of pollution, and PVC is difficult to recycle. Also, lead has been found in PVC. According to a report (PDF) in the Journal of Environmental Health, lead levels are higher in older artificial trees.
Living trees also have a down side. You can only keep them inside for 4 to 10 days, depending on the type of tree or it will die. Second, you have to live in the right climate to plant a tree after Christmas. If the ground is frozen outside, you can't do it. Some can live in containers for a year or two, but eventually they grow too big to bring back inside, or even to grow in your yard.
Ultimately, Farmed Christmas trees are the best choice renewable resource. Growing trees in farms absorb carbon dioxide, and after the holidays, the trees can be fully recycled into mulch. Check Earth 911 to see where to take your dead tree after the 25th. Look for locally grown trees (saves carbons from long distance transport), and ask if the farm uses integrated pest management instead of tons of chemicals.

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