Plastics and mixed paper in municipal solid waste are valuable resources with high calorific value. However, the recycling cost to utilize them tends to be expensive. In addition, recycling system has to be consistent with the reduce of wastes on which should be put higher-priority to lower carbon emission and save resources in the long term. In this paper, we proposed a recycling system (smart recycling system) which consists of a local center an d existing facilities in arterial industries. In the local center, collected waste plastics and mixed paper from household are processed on the same line into a form suitable for transportation and handling in a facility of arterial in dustry which can utilize those wastes effectively. At the same time, a part of plastics with high quality is processed into a recycled resin in the center. It was suggested that, by utilizing existing facilities in arterial industries which have enough and flexible capacity to accept those wastes, the system can be a robust system even if the amount of wastes generation fluctuates widely. The effect of CO₂ reduction and cost by installing the system were calculated and it was estimated that 3.5 million ton of additional annual CO₂ reduction could be brought in Tokyo and surrounding three prefectures without co nsiderable increase in cost.