The runner-up was the Dominican Republic, followed by Jamaica, Guatemala and Vietnam.
Most developed nations lagged in the study. While Britain ranked 74th, the United States snagged the 114th spot, because of its hefty consumption and massive ecological footprint.
The United States was greener and happier 20 years ago than it is today, the report said.
Other populous nations, such as China and India, had a lower index brought on by their vigorous pursuit of growth-based models, the survey suggested.
"As the world faces the triple crunch of deep financial crisis, accelerating climate change and the looming peak in oil production, we desperately need a new compass to guide us," said Nic Marks, founder of the foundation's center for well-being.
Marks urged nations to make a collective global change before "our high-consuming lifestyles plunge us into the chaos of irreversible climate change."
The report, which was first conducted in 2006, covers 99 percent of the world population, the statement said.
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