Recycling is processing used materials (waste) into new products to prevent the waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution (from incineration), and water pollution (from landfilling) by reducing the need for "conventional" waste disposal, and lower greenhouse gas emissions as compared to virgin production. Recycling is a key component of modern waste reduction and is the third component of the "Reduce, Reuse, Recycle"
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. However, for many materials, this is often difficult or too expensive (compared with producing the same product from virgin raw materials or other sources), so "recycling" of many products or materials involve their reuse in producing different materials.
Downcycling is the process of converting waste materials or useless products into new materials or products of lesser quality, and reduced functionality. The goal of downcycling is to prevent the waste of potentially useful materials, reduce the consumption of fresh raw materials, reduce energy usage, reduce air pollution and water pollution, and lower greenhouse gas emissions as compared to virgin production (though re-use of tainted toxic chemicals for other purposes can have the opposite effect). A clear example is plastic recycling, which turns the material into lower grade plastics.
Most recycling is actually downcycling; it reduces the quality of a material over time. Producing products by downcycling does reduce energy and CO2 emissions entailed from producing products from scratch with new raw materials, however, it does not reduce the demand for raw materials, the energy and the CO2 emissions toward manufacturing new material which created the original waste.
So next time someone tells you that they have a recycling program you might ask, “By whose definition?”