The Obama administration is expected to propose a birth-control compromise today for Catholic-run institutions that don't want to pay for their employees to avoid pregnancy. New federal rules guarantee free contraception coverage, but a narrow exception already exists for Catholic churches that don't believe in not having babies. The compromise would still allow women to access contraception but would not make objecting employers pay for it directly.
Update: Here's a fact sheet with details about the compromise. The upshot: Religious employers aren't required to pay for birth control, but if they don't cover it, the woman's insurance company has to shoulder the whole cost.
Even with the compromise, the administration's contraception policy ranks pretty high on the list of green initiatives it's undertaken. It's not usually labelled as an environmental policy, but babies use a lot of stuff! And then they grow up and use even more.
That said, hormone-based birth control may be less eco-friendly than plain old condoms (even allowing for the fact that you never see ortho-tricyclen strewn on the ground in parks).