I’ve always wondered about this–electric hand dryers are better for the environment than paper towels? Well–yes and no:
Franklin Associates reached a similar conclusion in 2002, when it conducted a life-cycle assessment at the behest of Excel Dryer, the company behind the XLerator. The study, which took into account the energy used both to mine raw ores and to chop down trees, concluded that recycled towels result in an energy expenditure of 460 kilojoules per use, versus 222 kilojoules per use for a standard dryer. But like their colleagues at the Climate Conservancy, the authors assumed that each washroom user went through two towels. By halving your consumption to a single sheet, then, you can essentially erase any difference between towels and old-school dryers. (The newfangled dryers still come out way ahead.)
So, use either one piece of recycled paper towel or use the newer (more powerful/efficient) hand dryer. But I agree with the author, given the environmental costs of either approach, wipe your hands on your pants leg.