This work has presented a methodology through the approach of industrial ecology to view residual streams as having potential to be converted into useable products and energy. The residual streams include MSW, compost residuals, recycling residuals, etc. The idea being that each process generates a residual stream that can have a further use. The methodology presented describes an approach to account for costs and potential environmental impacts for alternatives that convert residuals into useful products and energy. The method of accounting first identifies the benefits of conversion and then adds process costs and potential environmental impacts from the various steps of processing. Should this sequence of steps lead to higher costs or higher environmental impacts for the alternative as compared to the baseline the analysis can be stopped, as the alternative process is not beneficial. When a process is eliminated, other alternatives or variations can be considered.