According to an article in this morning's Independent, gardening is not very environmentally friendly but I think that it depends on your approach. This is my approach to minimising the negative effects of gardening:
Compost
I keep a compost heap for garden waste and vegetable trimmings which reduces the amount of waste being carted to a landfill site and produces a compost suitable for use as a soil improver. Personally, I find it too coarse for use as a potting compost so I use a commercial peat-free compost for potting and other general purpose uses. I have successfully grown potatoes in bags with a mixture of the peat-free compost and earth.