During recent years several attempts have been made to incorporate environmental and natural resources degradation into national accounts. GNP as measured by the traditional system of national accounts does not consider environmental degradation caused by inefficient exploitation of natural resources. While the complete omission of environmental impacts is not possible, there could be an optimal level of environmental degradation. However, environmental degradation cannot be quantified easily. Therefore, there is a need for a different approach to estimate the level of environmental degradation so that it can be accounted for in the GNP. In such cases where sufficient data are not available, especially for the past, the fuzzy logic method is practical. This paper applies the fuzzy set theory to estimate the trends of environmental degradation in Iran in the period 1959-1998.