Iceland is the leader in a league table judging the European country best able to give citizens a long and happy life. Estonia comes bottom of the 30-nation survey while the UK lurks below Romania, at number 21 in the chart.

The European Happy Planet Index used carbon efficiency, life satisfaction and life expectancy to rate the countries. The survey, published by the New Economics Foundation and Friends of the Earth, reveals that Europe is now worse at creating well-being than it was 40 years ago.

"Countries like Iceland clearly show that happiness doesn't have to cost the earth," said Nic Marks, founder of the foundation's Centre for Well-being. "Iceland's combination of strong social policies and extensive use of renewable energy demonstrates that living within our environmental means doesn't mean sacrificing human well-being."

The Scandinavian countries do best in the survey. Sweden is second, Norway third and Denmark sixth. Immediately above Estonia, at the bottom of the table, are Luxembourg, Bulgaria and Greece.

Andrew Simms, the foundation's head of climate change, said countries with a strong market-led economic model fared least well. "What is the point if we burn vast quantities of fossil fuels to make, buy and consume ever more stuff, without noticeably benefiting our well-being?"

Iceland has rich sustainable energy source, via the volcanic geology, and its government commits more resources to health than any other country in Europe.

Luxembourg is the worst country for its carbon footprint and the UK comes fourth from the bottom on that rating. Europe as a whole has almost three times its "fair" global share of carbon emissions.