No plastic is truly green, in my opinion.
Most produce bags, as opposed to deli wraps, used in conventional stores are made of #2 high density polyethylene plastic (HDPE) (safeway, they’re marked in chasing arrows) or #4 low density polyethylene (LDPE) plastic. HDPE #2 and LDPE #4 are conventional plastics made from petroleum, a non-renewable resource. Deli counter wraps are usually #3 polyvinyl chloride (PVC) which can leach hormone-disrupting phthalates into your food.
Green supermarkets such as Whole Foods also use #7 PLA bioplastic bags made from plant sources, such as corn. These are different than #7 polycarbonate (PC) plastic, which is made with Bisphenol-A (BPA).
Neither #2, #4 or #7 PLA plastics have been found to leach chemicals into food. They can be reused so long as they haven't collected food residues where bacteria grow.
Unfortunately, no plastic bags can be put in municipal recycling bins, incidentally, even in those that accept #2 milk jugs and shampoo and detergent bottles. http://www.obviously.com/recycle/guides/common.html
But many Whole Foods stores take all plastic bags back for recycling.
As an alternative, I recommend Green Depot’s reusable produce bags, http://greendepot.com, or the many choices at reusablebags.com