People relax on rafts in Iceland's Blue Lagoon, a natural spa near capital city Reykjavik filled with geothermally warmed seawater said to soften and heal the skin.

This Scandinavian island nation of about 300,000 people was recently ranked first in an annual United Nations list of the most desirable places to live.

The Human Development Report 2007/2008 rated the countries in terms of their "human development index": a statistical analysis of factors that influence a person's quality of life, such as per capita gross domestic product and life expectancy.

For instance, Icelanders can expect to live 81.5 years, according to 2005 figures in the report. Adult literacy rate is high, and the combined enrollment rate for primary, secondary, and advanced university degrees is 95.4 percent.

The report focused on the "fierce urgency" of climate change as the defining human development issue of this generation. (Get the basics on global warming.)

"All development is ultimately about expanding human potential and enlarging human freedom," the authors wrote. "Climate change threatens to erode human freedoms and limit choice."

After Iceland, the next nine best places to live are: Norway, Australia, Canada, Ireland, Sweden, Switzerland, Japan, the Netherlands, and France. The United States (not pictured) came in 12th, a drop from eighth place in 2006.

The AIDS-devastated African nations of Burkina Faso and Sierra Leone came in last.

The full report can be found here.

— Christine Dell'Amore

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