The European Environment Agency said there were no quick fixes to the changing consumption patterns but added that firms in Europe had to become more efficient to save natural resources.
"Continuing depletion of Europe's stocks of natural capital and flows of ecosystem services will ultimately undermine Europe's economy and erode social cohesion," the EEA, a European Union agency, says in its Environment State and Outlook Report 2010, which was released Wednesday.
EEA Executive Director Jacqueline McGlade was quoted by the BBC as saying Europe as well as the rest of the planet is consuming "more natural resources than is ecologically stable."
"Climate change is the most visible sign of instability so far, but a range of global trends suggest greater systematic risk to ecosystems in the future," she said.
The report claims EU environmental policies brought "substantial" improvements. "However, major environmental challenges remain which will have significant consequences for Europe if left unaddressed," the report says.
While Europe expanded its network of protected areas, it failed to meet its target of halting biodiversity loss by 2010.
"To improve the situation we must prioritize biodiversity and ecosystems in policy making at all scales, particularly addressing agriculture, fisheries, regional development, cohesion and spatial planning," the report says.
The report lauds Europe for reducing its greenhouse gas emissions footprint and being on track to meet its commitments under the Kyoto Protocol, which runs out in 2012. The report nevertheless urges the continent to step up climate protection efforts to "increase Europe's resilience" and keep global temperatures from rising beyond 3.6 degrees Fahrenheit from pre-industrial levels.
Many environmental issues challenging Europe, such as climate change and biodiversity loss, are globally linked phenomena, the report warns.
They're affected by issues beyond Europe's control, for example unsustainable resource in the developing world, "that span the societal and economic spheres and undermine important ecosystem services," the report suggests. "As environmental challenges have become more complex and more profoundly linked to other societal concerns, the uncertainties and risks associated with them have increased."