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Although Beijing has carried out municipal solid waste （MSW） source separation since 1996, it has largely been ineffective. In 2012, a ＂Green House＂ program was established as a new attempt for central sorting. In this study, the authors used material flow analysis （MFA） and cost benefit analysis （CBA） methods to investigate Green House＇s environment and economic feasibility. Results showed that the program did have significant environmental benefits on waste reduction, which reduced the amount of waste by 34%. If the Green House program is implemented in a residential community with wet waste ratio of 66%, the proportion of waste reduction can reach 37%. However, the Green House is now running with a monthly loss of 1982 CNY. This is mainly because most of its benefits come from waste reduction （i.e., 5878 CNY per month）, which does not turn a monetary benefit, but is instead distributed to the whole of society as positive environmental externalities. Lack of government involvement, small program scale, and technical/managerial deficiency are three main barriers of the Green House. We, thus, make three recommendations： involve government authority and financial support, expand the program scale to separate 91.4 tons of waste every month, and use more professional equipment/technologies. If the Green House program can successfully adopt these suggestions, 33.8 tons of waste can be reduced monthly, and it would be able to flip the loss into a profit worth 35034 CNY.