The thesis builds a two-period model to examine the impact of take-back (TB) and deposit-refund (DR) policies on environmental damage. In the TB regime, we explore the optimal recovery and recycling policies. We investigate how a monopolist in a final good market uses recycled and primary inputs to optimize its intertemporal profits. We also derive the optimal recovery and recycling policies which minimize the environmental damage. In the DR regime, we impose a deposit on the final good production and use the funds collected to subsidize the recycling activities. We derive the optimal deposit and subsidy (refund) policies which minimize the environmental damage. Finally, we compare the difference of environmental damage between TB and DR measures. We also explore how the product quality and the price of primary input affect the optimal environmental policies.