Environmental problems are complex: the same problem may have several causes and the same stress may cause several problems. An environmental indicator is a number that is meant to indicate the state of development of important aspects of the environment. Strictly speaking. the term "indicator" refers to a specific number along the time or space dimension. A set of indicators should give information on development, environmental quality, and environmental policy. 

The present paper includes an overview of the state of environmental indicators (Part I) and application of the response function method to the indicators issue (Part II). The main goal of this paper is to give information on further development of environmental indicator activity. As the application of the environmental indicators is of special interest to IIASA's Projects entitled "Forests Resources, Environment, and Socioeconomic Development of Siberia" and "Modeling Land Use and Land Cover Change in Europe and Northern Asia" the paper is mainly focused on the formation of indicators for the land-use and forest studies.