Iran as a rapidly developing country, whose Economy is enriched by oil and gas exports, has to integrate Green Economy concept into its energy sector. In order to integrate environmental concerns into energy sector, an Energy-Environment Review (EER) was considered as the mainstreaming tool capable of examining the interface between energy and the environment. The results of the EER should be interpreted, in the light of the objective of the Five-Year Development Plan in Iran, to achieve fast and sustainable Green growth and accelerate the transition to a market Economy. The proposed actions will promote economic efficiency, use of energy resources through a proper allocation of scarce resources, including environmental resources, so as to achieve economic efficiency and environmental and social protection. This article updates trends in Iran and provides: to be stated continuously (i) an analysis of the current situation with regards to energy production and consumption; (ii) an evaluation of the growth prospects; (iii) the identification of environmental issues induced by the generation and use of energy and estimation of the associated costs of damages; (iv) the evaluation of the extent of contribution to the climate change phenomenon through emission of Greenhouse gases; (v) the evaluation of the proposed mitigation measures for the previously identified environmental problems; and (vi) conclusions and recommendations. It is assessed that the total health damage from air pollution in 2010 at about to be converted to dollars 160 × 1012Rials (US$ fifteen billion); equivalent to 1. 55% of nominal GDP. The damage cost to the global environment from the flaring of natural gas, assessed on the basis of a carbon price of US$ 17/ton CO2, is found to be approximately US$1. 02billion per year.