A new global measure of progress, the ‘Happy Planet Index’, reveals for the first time that happiness doesn’t have to cost the Earth.

It shows that people can live long, happy lives without using more than their fair share of the Earth’s resources.

The new international ranking of the environmental impact and well-being reveals a very different picture of the wealth, and poverty, of nations.

The tiny nation of Vanuatu, one of the "happy isles of Oceania", has topped this new index by the UK-based New Economics Foundation (NEF) aimed to measure the environmental efficiency of global progress with its "Happy Planet Index" report.

With a population of roughly 200,000, the majority of people on Vanuatu live in a subsistence economy.

While Vanuatu, Colombia, Costa Rica, Dominica and Panama topped the list, none of the world’s leading industrialized nations cracked the top 50.

Canada ranked 111th in the 178-nation survey, which placed Germany at 88, Japan at 95, France at 129, the United States at 150 and Russia at 172.

Burundi, Swaziland and Zimbabwe filled the final three spots on the list.

"The nations that score well show that achieving long, happy lives without over-stretching the planet’s resources is possible," said the index.

Canadians came close to the index’s "reasonable ideal" when it came to measuring life satisfaction and life expectancy.

But Canada left a heavy ecological footprint, according to the study.

"The Happy Planet Index strips the view of the economy back to its absolute basics: what we put in (resources), and what comes out (human lives of different length and happiness)," the NEF said.

The Group of Eight (G8), an unofficial forum of the heads of leading industrialised nations meeting on July 15-17, failed to make the top 50. Host Russia came in at 172 in the 178-nation survey, with the United States at 150 and the UK at number 108.

The NEF, an independent group that did the index jointly with UK-based green campaign group Friends of the Earth, said the report showed high levels of resource consumption do not reliably produce high levels of well-being.

"The order of nations that emerges may seem counter-intuitive. But this is because policy makers have been led astray by abstract mathematical models of the economy that bear little relation to the real world," said NEF’s policy director Andrew Simms.