In the toilets at work, we have both electric hand driers and paper towels. I'm always surprised by the amount of people that use the paper towels, as I've never seen them as good for the environment. On the other hand, some people can't believe I use the hand drier, and ask if I'm aware how dirty they can be.
I looked into this, and they do have a point.
Hand driers usually have filters that need regular cleaning to remove dust and grime. If this isn't done, then bacteria can breed inside the machine, and then get blown onto your freshly washed hands. However, I do wonder if this is any worse than the bacteria that's always on toilet door handles, from people who haven't washed their hands. I'm still alive, so I guess it's not a major issue.
The argument for paper towels is that they're greener because they can be recycled and they don't use electricity. I've looked into this.
Dirty paper towels are often unsuitable for recycling, because they are made from low-grade paper, and are contaminated with bacteria (and worse) from people's hands. There's also a vast amount of energy used to fell trees, cut them, ship them to the paper plant, grind them into pulp, dry them (using hot air!), cut them into sheets, and drive them to the office. So I reckon using a hand drier eliminates a lot of unnecessary energy use.
Unfortunately, the information I have is from sources connected with either the paper industry or the hand drier manufacturers. I don't have concrete figures or independent evidence, so it's difficult to prove either argument. At the moment, I'm sticking with the hand drier.
So what's your preference - paper towels or hand drier?