The latest edition of the ASG newsletter has an article about environmentally friendly fabrics. It was really interesting. (((here's a link to the magazine. Not sure if it lets you read past the first page online.
If not, find a friend in ASG and get their copy!)))
http://www.asg.org/html/publication.html
The article claims that fabric production is one of the biggest polluting industries in the world. My guess is that it is probably because so much of it takes place in countries with very lax environmental laws.