Cardboard does not transfer heat well, where paper does. Cardboard has double walls and its molecular make-up prevents the transfer of heat from one side to the other. Cardboard is very efficient in insulation, the process of slowing down or preventing conduction of heat (the transfer of heat between two objects).
Because cardboard is so well insulated, heat is not transfered between the two sides, making it stay on the side where it came from. That is why you feel no heat when you wrap your hands around the exterior of a cardboard sleeve, even though the interior side is absorbing heat from the coffee cup.
A way to help the environment if you drink a large amount of coffee is to save one of those little insulating rings of cardboard in your glove compartment and keep it for the next time you go to a coffee shop. If everyone chose to do this, the amount of cardboard used for coffee insulators would be drastically reduced!
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