Yes, you can use recycled wrapping paper, news paper and even cloth. I prefer to use cloth, because you can make it really colorful and pretty. Here are some links to recycled wrapping paper.
As the first post points out, the most environmentally friendly wrapping paper should be able to be reused indefinitely, such as cloth. However if you do not have enough cloth to cover the present, I find that newspaper is best. Major newspapers are already printed on recycled paper and there is a ton of newspaper to be used. The way I take advantage of newspaper is I try to find a page from the comics section or I try to find an article that would interest the person getting the gift. That way the wrapping paper says more about you, the birthday person, and the environment than printed wrapping paper.
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