As always the answer is complex. CDs are manufactured and therefore like any other physical product use resources. However music downloads bear their own overhead being stored on huge energy intensive server farms all over the globe.
Farms are environmentally costly to build, house, cool and maintain. Downloads use energy as the data is shunted from the server farm to your PC and don't forget that your PC is a resource hungry device too.
All in all there may not be that much difference between the environmental cost of the CD compared to downloads but at least with the CD you have a long lasting high quality backup of your music.
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