Plastic bags have been around for less than a generation, so tests that gauge biodegradability in the ground are not reliable. Thus, some environmentally conscious consumers have resorted to burning the bags to get rid of them, but this too carries a number of ill-effects.

Composition

Plastic bags are made from either a natural gas or oil refining by-product, called high-density polyethylene, which contains the chemical elements of hydrogen and carbon.

Dioxin = Poison

When plastic bags burn, the composition of the bag mixed with the heat produces a highly toxic chemical called dioxin. Dioxins have been linked to cancer, can interfere with the endocrine gland system which produces hormones, and have been known to affect both the immune system and reproduction.

Animal Health Hazards

As dioxin-filled smoke from burning plastic fills the air, it eventually settles on the ground nearby, where it can be eaten by animals such as cows and become concentrated in their fat. Some of that dioxin is excreted with cow's milk, while the rest remains in the animal's fat supply.

Human Health Hazards

If humans are near burn piles that contain plastic bags, they can easily ingest the toxic fumes directly into their systems. But the more common method of dioxin invading human bodies is in the consumption of meat and dairy products from animals that breathed these fumes.

Local and Global Response

Some countries' governments are banning plastics because of the associated health risks involved in degradation. In June of 2008, China banned some types of plastic bags after it was reported that its 1.3 billion people use 3 billion bags every day, according to the (U.K.) Times Online.

Source:

IfEnergy.com: Can you Burn Plastics?

Wisconsin Department of Natural Resources: Health & Environmental Effects of Burning Agricultural Plastics

Eco-Ethical.co.uk: Plastic, Paper or Cotton Bags?

More Information:

CNN.com: All About Plastics

Times Online: China Struggles to Enforce Ban