You may look at the up-front cost of modern cloth diapering systems and say, "This can't be cheaper than buying disposables." But, do the math.
I use gDiapers. They are a hybrid diapering system that can use either cloth or biodegradable/compostable inserts for absorbency. I have discovered that using gDiapers is cheaper than disposables once your baby is big enough to be in the medium sized ones. The smalls have a big up-front cost that is never regained unless your baby is under 12 lbs for 3 months.
Here's the math:
Newborn Pack (12 newborn, 6 smalls) $150
2 more small gPants $36
24 gCloths (fits newborn and small) $120
If you don't want to do cloth all the time, a case of 160 biodegradable refills $52 or one package of 40 is $15.
Case of size 1 (180 diapers) = $50
One case will last two weeks at 12 diapers per day, so for one month = $100
That's if you buy them in cases. They are much more expensive in smaller packages.
The small gDiapers will last you until your baby is 12 lbs. Ewan was 12 lbs after the first 6 weeks, so the gDiapers were way more expensive than traditional disposables. But, on the bright side, I can reuse the gDiapers for the next baby. I will only have to keep buying the disposable refills if I want them.
Interestingly, when you move to the medium size, the opposite is true.
8 medium gPants $144
8 large gPants $144
24 gCloths (fits medium and large) $120
6 extra liners (fits medium and large) $20
Total investment for 100% cloth diapering for 3 years = $428
If you do part-time biodegradable inserts:
128 medium/large biodegradable refills (1 case) = $52
1 case per month for 36 months (3 years) is $1872
You will spend about $100 per month until your baby is out of diapers. As the sizes go up, the packages have fewer diapers (and you will use few diapers as your baby gets older) but the packages still cost the same.
If your baby is in diapers for 3 years you will have spent about $3600 on diapers.
Conclusion: After your baby is 12 lbs, gDiapers with part-time cloth, part-time biodegradable liners is cheaper than traditional disposables. If you go full cloth it is even cheaper! Even if you factor in laundering the gDiapers, you are still ahead. (Check out this site for estimations on how much laundry costs.) Of course, it takes more time and effort to use the gDiapers. You do have to change the cloth ones more often because they don't have the new stay-dry technology that disposables have. And, dirty diaper changes are more messy with cloth--you can't just fold it all up and toss it.
Also, gDiapers are only cheaper if you use the cloth inserts at least part of the time. If you go full biodegradable inserts all the time, it is more expensive than traditional disposables.