The world of green, like any other industry, has its own language - for the person trying to make some environmentally changes to their life, it can get awfully confusing - take for instance the terms degradable, biodegradable and compostable when used in relation to plastics. There is a difference between the terms and it may play a role in your purchase decisions.

Biodegradable Plastics

Biodegradable products break down through the action of a naturally occurring microorganism, such as bacteria,  fungi etc. over a period of time. These products are usually made from plant or animal sources. Examples of biodegradable include paper, vegetable scraps and some forms of plastics made from ingredients such as corn starch.

There are some disadvantages to biodegradable waste. When dumped in landfills, it's often dug under where the "good" bacteria can't survive in the oxygen depleted environment. It then breaks down under anaerobic conditions which creates methane, a greenhouse gas with over 62 times the GWP (Global Warming Potential) of carbon dioxide. Also, biodegrable waste can contain toxins. For example, human and animal waste, which is considered biodegradable may contain traces of all sorts of toxins such as heavy metals and pesticides depending on the person/animal's diet.

Degradable Plastics

Degradable plastics are oil based and break down through chemical reactions rather than the activity of micro-organisms, so they can degrade in an anaerobic environment into water, CO2, biomass and trace elements.

Compostable Plastic

This is pretty close to biodegrable plastic but "greener". According to the  American Society for Testing & Materials, for plastic to be considered as compostable, it must be able to break down into carbon dioxide, water and biomass at the same rate as paper. It also needs to look like compost, should not produce any toxic material and should be able to support plant life. Compostable items are made from plant materials such as corn, potato, cellulose, soy and sugar.

So:

Biodegradable - green, but can leave traces of toxins
Degradable - made from oil, but breaks down into harmless materials
Compostable - green from start to finish.. perhaps

It looks like the greenest choice is clear - compostable plastics are the most earth friendly option.

Or is it?

Green plastic challenge

One of the problems involved with creating green plastics is the amount of energy needed in production. In some scenarios, the fossil fuel input is more than what it is to create the equivalent in crude oil based plastic product.

All breakdown of the above three kinds of "green" plastics also creates carbon dioxide. We're somewhat caught between a rock and a hard place in this. The compromise appears to be using the plants that the plastic is created from also as an energy source for production.

Instead of carbon emissions being generated from sources sequestered under the ground such as coal and oil, the burning of corn stalks and other plants would not increase net carbon dioxide in the atmosphere, because new plants would absorb an equal amount of the gas.

There's an in-depth discussion on this topic on Scientific American - How green are green plastics?