There are various environmental concerns about the production and disposal of CDs/DVDs and their packaging. This page lists some of your options.
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CD production
There seems to be no alternative to using polycarbonate plastic in the production of CDs. Therefore, the first green option is to reduce the number of CDs that you produce. For example:
For marketing mailshots, is it really necessary to send out thousands of CDs? Is there a way to refine your target audience?

• If you issue lots of information on CD, consider using a DVD instead.
• Consider using small “business card” CDs.
• Most people with computers have web access, so why bother with a CD?
• Use CD-RWs instead of CD-Rs if you don’t need permanent backups. Or zip drives, or Flash memory cards…
• Buy CDs on spindles if you don’t need jewel cases.
• Download your music into portable players rather than burn CDs

CD packaging
There is plenty of scope for environmentally-friendly packaging of CDs and DVDs. A standard CD jewel case contains a lot of plastic. A typical DVD package is worse but probably survives impacts better than a jewel case.
Here’s a good article on the whole subject of recyclable CD and DVD packaging: The recycling phenomenon by Karen Faux.
The first alternative option is a cardboard case but still using a plastic tray.
However the best solution must be all-cardboard packaging, ranging from a simple sleeve through fold-out options to tray replacements. Searching online will find many sources for cardbord packaging. These are harder to find in the UK – try Lynic Technology plc and Amarok Multimedia Ltd.
Repak in Sweden provide cardboard packaging that has a tray but does not use a spindle hub to engage the CD (available in CD, DVD, A5 and A4 formats).
Similarly, Pozzoli in Italy provide similar cardboard packaging (Coverpak and Overpak).

• Also consider using environmentally friendly inks.
• And is that surrounding cardboard outer sleeve really necessary?
• Don’t use PVC DVD packaging.
• Use cardboard packages finished with a water based lacquer.
• A typical CD jewel case and insert weighs 80g (without CD).
• A typical cardboard CD wallet weighs 25g (without CD).
• A typical DVD package weighs 85g (without DVD).

CD reuse and recycling
If you have unwanted music CDs, give them to a charity shop.
There are some innovative uses of spare CDs, eg bird scarers: see WorldWise, Inc., USA: Recycling CDs and DVDs and Recycle Those Old CD’s.
However, CDs can be recycled… but give them a good scratch to ensure they’re unreadable if they contain sensitive data.
Article from PHD Computer Consultants Ltd