Ultimately, any bag that is made to be used once and thrown away is bad for the environment. The amount of energy and raw materials put into a product is wasted if its used only once. The best environmental choice is to choose reusable products and less wasteful ways of carrying our groceries or lining our green bins (see below!).
Many ‘biodegradable’ bags are not actually environmentally friendly, as they simply break down from one large plastic bag into small flakes of plastic. These flakes of plastic persist in the environment and cause environmental harm.
'Compostable' bags are far less common, and are made of vegetable-based oil with the intention to break down completely into organic matter. Unfortunately, 'compostable' bags will only break down in specific conditions of air and light -- in a landfill, in the absence of air and light, compostable bags are unlikely to decompose. Compostable bags actually require more energy in production than non-compostable bags.