Though the pollution used to produce paper bags is significant, they are made of a biodegradable, renewable resource. Given the fact that shopping bags are designed to be disposable, I think the negative impact of billions of plastic bags, which are made with petroleum and never biodegrade, is greater than the impact of paper bags.

I totally disagree with the comment above. The environmental impact of tree farming and paper mills is huge, but even more than that, the biodegradation of paper products releases methane, a greenhouse gas with 21 times the global warming potential of carbon dioxide. Given that plastic production uses less energy and creates fewer emissions than paper production, it is pretty clear to me that plastic is preferable.