>Environmentally friendly is not measured on one indicator. Perhaps in terms of energy-intensity, paper is higher than plastic. But energy use of store bags is relatively negligible anyway, not to be ignored but also not a grave threat. But in terms of the spread of plastics and biodegradability, a one-time paper bag is certainly better than a one-time plastic back, and not quite as negligible in its impact.
The problem here is that increased energy use applies to every bag used, whereas the concern about biodegradability only applies for bags that are mismanaged. A plastic bag that's buried in a landfill or burned in an incinerator is a non-issue, and most (almost all?) bags end up properly disposed.
>Besides, if plastic is being replaced by paper, it simply shows incentives work
Is it? The parent commenter said that plastic bags were banned, not that they were taxed.