It depends on if you have sewers or a septic tank. If you have a sewer then it goes into the sewer, agitation as it moves breaks it up and it breaks down. Then it goes to a sewage treatment plant where solid matter and other contaminants are removed and the water is cleaned before being put back into wherever the sewer system drains to.
If you have a septic tank then it goes into your septic tank where it sits and breaks down before slowly draining into a series of perforated pipes that rest under something called a “leach field” where the waste is slowly released out. Since it is essentially just human waste, water, and toilet paper there isn’t any negative environmental effects so long as the septic tank is properly maintained.
Toilet paper is designed so that it dissolves quickly in water, unlike many other kinds of paper. This is why they don’t recommend flushing other paper products like paper towels or Kleenex down the toilet, they can clog up pipes. The toilet paper dissolves into wood pulp, which can easily move along with the other waste water through pipes and to the waste processing plant. The pulp will be broken down by micro-organisms into nutrients which re-enter the food chain.
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