World Enters “Era of Global Water Bankruptcy”  

Flagship report calls for fundamental reset of global water agenda as irreversible damage pushes many basins beyond recovery

UN Headquarters, New York (20 January 2026)– Amid chronic groundwater depletion, water overallocation, land and soil degradation, deforestation, and pollution, all compounded by global heating, a UN report today declared the dawn of an era of global water bankruptcy, inviting world leaders to facilitate “honest, science-based adaptation to a new reality.”

“Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era,” argues that the familiar terms “water stressed” and “water crisis” fail to reflect today’s reality in many places: a post-crisis condition marked by irreversible losses of natural water capital and an inability to bounce back to historic baselines.

“This report tells an uncomfortable truth: many regions are living beyond their hydrological means, and many critical water systems are already bankrupt,” says lead author Kaveh Madani, Director of the UN University’s Institute for Water, Environment and Health (UNU-INWEH), known as 'The UN’s Think Tank on Water.'

Expressed in financial terms, the report says many societies have not only overspent their annual renewable water “income” from rivers, soils, and snowpack, they have depleted long-term “savings” in aquifers, glaciers, wetlands, and other natural reservoirs.

This has resulted in a growing list of compacted aquifers, subsided land in deltas and coastal cities, vanished lakes and wetlands, and irreversibly lost biodiversity.

The UNU report is based on a peer-reviewed paper to be published in the journal of Water Resources Management that formally defines water bankruptcy as

• persistent over-withdrawal from surface and groundwater relative to renewable inflows and safe levels of depletion; and

• the resulting irreversible or prohibitively costly loss of water-related natural capital.

By contrast:

• “Water stress” reflects high pressure that remains reversible

• “Water crisis” describes acute shocks that can be overcome

The report is issued prior to a high-level meeting in Dakar, Senegal (26–27 Jan.) to prepare the 2026 UN Water Conference, to be co-hosted by the United Arab Emirates and Senegal 2-4 Dec. in the UAE.  

While not every basin and country is water-bankrupt, Madani says, “enough critical systems around the world have crossed these thresholds. These systems are interconnected through trade, migration, climate feedbacks, and geopolitical dependencies, so the global risk landscape is now fundamentally altered.”

Madani underlines the following four essential points:

• Water cannot be protected if we allow the hydrological cycle, the climate, and the underlying natural capital that produces water to be interrupted or damaged. The world has an important and still largely untapped strategic opportunity to act.

• Water is an issue that crosses traditional political boundaries. It belongs to north and south, and to left and right. For that reason, it can serve as a bridge to create trust and unity between and within nations. In the fragmented world we live in, water can become a powerful focus for cooperation and for aligning national security with international priorities.

• Investment in water is also investment in mitigating climate change, biodiversity loss, and desertification. Water should not be treated only as a downstream sector affected by other environmental crises. On the contrary, targeted investment in water can address the immediate concerns of communities and nations while also advancing the objectives of the Rio Conventions (climate, biodiversity, desertification).

• A renewed global emphasis on water could help reaccelerate stalled negotiations and potentially reenergize halted international processes. A practical and cooperative focus on water offers a way to connect urgent local needs with long-term global goals.

Hotspots

In the Middle East and North Africa region, high water stress, climate vulnerability, low agricultural productivity, energy-intensive desalination, and sand and dust storms intersect with complex political economies;

In parts of South Asia, groundwater-dependent agriculture and urbanization have produced chronic declines in water tables and local subsidence; and

In the American Southwest, the Colorado River and its reservoirs have become symbols of over-promised water.

A world in the red

Drawing on global datasets and recent scientific evidence, the report presents a stark statistical overview of trends, the overwhelming majority caused by humans:

• 50%: Large lakes worldwide that have lost water since the early 1990s (with 25% of humanity directly dependent on those lakes)

• 50%: Global domestic water now derived from groundwater

• 40%+: Irrigation water drawn from aquifers being steadily drained

• 70%: Major aquifers showing long-term decline

• 410 million hectares: Area of natural wetlands – almost equal in size to the entire European Union – erased in the past five decades

• 30%+: Global glacier mass lost in several locations since 1970, with entire low- and mid-latitude mountain ranges expected to lose functional glaciers altogether within decades

• Dozens: Major rivers that now fail to reach the sea for parts of the year

• 50+ years: How long many river basins and aquifers have been overdrawing their accounts

• 100 million hectares: Cropland damaged by salinization alone

• And the human consequences:

• 75%: Humanity in countries classified as water-insecure or critically water-insecure

• 2 billion: People living on sinking ground.

• 25 cm: Annual drop being experienced by some cities

• 4 billion: People facing severe water scarcity at least one month every year

• 170 million hectares: Irrigated cropland under high or very high water stress – equivalent to the areas of France, Spain, Germany, and Italy combined

• US$5.1 trillion: Annual value of lost wetland ecosystem services

• 3 billion: People living in areas where total water storage is declining or unstable, with 50%+ of global food produced in those same stressed regions.

• 1.8 billion: People living under drought conditions in 2022–2023

• US$307 billion: Current annual global cost of drought

• 2.2 billion: People who lack safely managed drinking water, while 3.5 billion lack safely managed sanitation

Says Madani: “Millions of farmers are trying to grow more food from shrinking, polluted, or disappearing water sources. Without rapid transitions toward water-smart agriculture, water bankruptcy will spread rapidly.”

The withdrawal of groundwater near Lucerne Lake (dry) in San Bernardino County, Mojave Desert, California has caused the land to subside Photo: Loren Metzger, USGS

A new diagnosis for a new era

A region can be flooded one year and still be water bankrupt, he adds, if long-term withdrawals exceed replenishment. In that sense, water bankruptcy is not about how wet or dry a place looks, but about balance, accounting, and sustainability.

Says Madani: As with global climate change or pandemics, a declaration of global water bankruptcy does not imply uniform impact everywhere, but that enough systems across regions and income levels have become insolvent and crossed irreversible thresholds to constitute a planetary-scale condition.

“Water bankruptcy is also global because its consequences travel,” Madani explains. “Agriculture accounts for the vast majority of freshwater use, and food systems are tightly interconnected through trade and prices. When water scarcity undermines farming in one region, the effects ripple through global markets, political stability, and food security elsewhere. This makes water bankruptcy not a series of isolated local crises, but a shared global risk that demands a new type of response: Bankruptcy management, not crisis management.”

A call to reset the global water agenda

The report warns that the current global water agenda – largely focused on drinking water, sanitation, and incremental efficiency improvements – is no longer fit for purpose in many places and calls for a new global water agenda that:

• Formally recognizes the state of water bankruptcy

• Recognizes water as both a constraint and an opportunity for meeting climate, biodiversity, and land commitments

• Elevates water issues in climate, biodiversity, and desertification negotiations, development finance, and peacebuilding processes

• Embeds water-bankruptcy monitoring in global frameworks, using Earth observation, AI, and integrated modelling

• Uses water as a catalyst to accelerate cooperation between the UN Member States

In practical terms, managing water bankruptcy requires governments to focus on the following priorities:

• Prevent further irreversible damage such as wetland loss, destructive groundwater depletion, and uncontrolled pollution

• Rebalance rights, claims, and expectations to match degraded carrying capacity

• Support just transitions for communities whose livelihoods must change

• Transform water-intensive sectors, including agriculture and industry, through crop shifts, irrigation reforms, and more efficient urban systems

• Build institutions for continuous adaptation, with monitoring systems linked to threshold-based management

The report underlines that water bankruptcy is not merely a hydrological problem, but a justice issue with deep social and political implications requiring attention at the highest levels of government and multilateral cooperation. The burdens fall disproportionately on smallholder farmers, Indigenous Peoples, low-income urban residents, women and youth while the benefits of overuse often accrued to more powerful actors.

“Water bankruptcy is becoming a driver of fragility, displacement, and conflict,” says UN Under-Secretary-General Tshilidzi Marwala, Rector of UNU. “Managing it fairly – ensuring that vulnerable communities are protected and that unavoidable losses are shared equitably – is now central to maintaining peace, stability, and social cohesion.”

“Bankruptcy management requires honesty, courage, and political will,” Madani adds. “We cannot rebuild vanished glaciers or reinflate acutely compacted aquifers. But we can prevent further loss of our remaining natural capital, and redesign institutions to live within new hydrological limits.”

Upcoming milestones --  the 2026 and 2028 UN Water Conferences, the end of the Water Action Decade in 2028, and the 2030 SDG deadline, for example -- provide critical opportunities to implement this shift, he says.

“Despite its warnings, the report is not a statement of hopelessness,” adds Madani. “It is a call for honesty, realism, and transformation.  Declaring bankruptcy is not about giving up, it is about starting fresh. By acknowledging the reality of water bankruptcy, we can finally make the hard choices that will protect people, economies, and ecosystems. The longer we delay, the deeper the deficit grows.This report declares that the world has already entered the era of Global Water Bankruptcy. The condition is not a distant threat but a present reality. Many human water systems are now in a post-crisis failure state where past baselines can no longer be restored.

• Global Water Bankruptcy is defined as a persistent post-crisis state of failure. In this state, long-term water use and pollution have exceeded renewable inflows and safe depletion limits. Key parts of the water system can no longer realistically be brought back to previous levels of supply and ecosystem function.

• Terms such as water stress and water crisis are no longer sufficient descriptions of the world’s new water realities. Many rivers, lakes, aquifers, wetlands, and glaciers have been pushed beyond tipping points and cannot bounce back to past baselines. The language of temporary crisis is no longer accurate in many regions.

• The global water cycle has moved beyond its safe planetary boundary. Together with climate, biodiversity, and land systems, freshwater has been pushed outside its safe operating space. The report concludes that the world is living beyond its hydrological means.

• Billions of people are living with chronic water insecurity. Around 2.2 billion people still lack safely managed drinking water, 3.5 billion lack safely managed sanitation, and nearly 4 billion face severe water scarcity for at least one month each year. Almost three-quarters of the world’s population live in countries classified as water insecure or critically water insecure.

• Surface waters and wetlands are shrinking on a massive scale. More than half of the world’s large lakes have lost water since the early 1990s, affecting about one-quarter of the global population that relies on them directly. Over the last five decades, humanity has lost roughly 410 million hectares of natural wetlands, almost the land area of the European Union. This includes about 177 million hectares of inland marshes and swamps, roughly the size of Libya or seven times the area of the United Kingdom. The loss of ecosystem services from these wetlands is valued at over US$5.1 trillion, similar to the combined GDP of around 135 of the world’s poorest countries.

• Groundwater depletion and land subsidence show that hidden reserves are being exhausted. Around 70 percent of the world’s major aquifers show long-term declines. Land subsidence linked to groundwater over-pumping now affects more than 6 million square kilometers, almost 5 percent of the global land area, and nearly 2 billion people. This permanently reduces storage and increases flood risk in many cities, deltas, and coastal zones.

• Water quality degradation further reduces usable water and accelerates bankruptcy. Growing loads of untreated wastewater, agricultural runoff, industrial pollution, and salinization are degrading rivers, lakes, and aquifers. Even where volumes appear sufficient on paper, the fraction of water that is safe for drinking, irrigation, and ecosystems continues to shrink.

• The cryosphere is melting, eroding a critical long-term water buffer. The world, in multiple locations, already lost more than 30 percent of its glacier mass since 1970. Some mountain ranges risk losing functional glaciers within decades, undermining water security for hundreds of millions of people who depend on rivers fed by glacier and snowmelt.

• Farmers and food systems sit at the very heart of Global Water Bankruptcy. Roughly 70 percent of global freshwater withdrawals are used for agriculture, much of it in the Global South. Groundwater provides about 50 percent of domestic water use and over 40 percent of irrigation water worldwide. Both drinking water and food production now depend heavily on aquifers that are being depleted faster than they can realistically recharge.

• Global food production is increasingly exposed to water decline and degradation. About 3 billion people and more than half of global food production are concentrated in areas where total water storage is already declining or unstable. More than 170 million hectares of irrigated cropland, about the combined land area of France, Spain, Germany, and Italy, are under high or very high water stress. Salinization has degraded roughly 82 million hectares of rainfed cropland and 24 million hectares of irrigated cropland, eroding yields in key global breadbaskets.

• Drought impacts are becoming steadily more human-made and extremely costly. The report identifies a growing pattern of anthropogenic drought, meaning water deficits caused by overuse and degradation rather than natural variability alone. These impacts already cost around US$307 billion per year, more than the annual GDP of almost three-quarters of United Nations Member States.

• Global Water Bankruptcy is also a justice, security, and political economy challenge. Without a deliberate commitment to equity, the costs of adjustment will fall disproportionately on farmers, rural communities, Indigenous Peoples, informal urban residents, women, youth, and other vulnerable groups. This imbalance increases the risk of social unrest and conflict in many regions.

• Governments need to urgently shift from crisis management to bankruptcy management. The report calls for an end to short-term emergency thinking. Instead, it urges strategies that prevent further irreversible damage, reduce and reallocate demand, transform water-intensive sectors, tackle illegal withdrawals and pollution, and ensure just transitions for people whose livelihoods must change.

• The current global water agenda is no longer fit for the Anthropocene. A narrow focus on drinking water, sanitation, and small efficiency gains will not be sufficient to resolve escalating water risks. In fact, that limited approach will increasingly compromise progress on climate action, biodiversity protection, land management, food security, and peace.

• Water can be a bridge in a fragmented world. Every country, sector, and community depends on freshwater. Investing in water bankruptcy management therefore becomes an investment in climate stability, biodiversity protection, land restoration, food security, employment, and social harmony. This shared reliance offers practical common ground for cooperation between North and South and across political divides within nations.

• World leaders are urged to use upcoming UN water milestones as decisive turning points. The report calls on governments and the UN system to use the 2026 and 2028 UN Water Conferences, the conclusion of the Water Action Decade in 2028, and the 2030 Sustainable Development Goal deadline to reset the global water agenda. It urges formal recognition of Global Water Bankruptcy, stronger monitoring and diagnostics, and a renewed effort to position water as a bridge for peace, climate action, biodiversity protection, and food security in an increasingly fragmented world.

Key Policy Messages

The world is already in the state of “water bankruptcy”. In many basins and aquifers, long-term overuse and degradation mean that past hydrological and ecological baselines cannot realistically be restored. While not every basin or country is water-bankrupt, enough critical systems around the world have crossed these thresholds, and are interconnected through trade, migration, climate feedbacks, and geopolitical dependencies, that the global risk landscape is now fundamentally altered.

• The familiar language of “water stress” and “water crisis” is no longer adequate. Stress describes high pressure that is still reversible. Crisis describes acute, time-bound shocks. Water bankruptcy must be recognized as a distinct post-crisis state, where accumulated damage and overshoot have undermined the system’s capacity to recover.

• Water bankruptcy management must address insolvency and irreversibility. Unlike financial bankruptcy management, which deals only with insolvency, managing water bankruptcy is concerned with rebalancing demand and supply under conditions where returning to baseline conditions is no longer possible.

• Anthropogenic drought is central to the world's new water reality. Drought and water shortage are increasingly driven by human activities, over-allocation, groundwater depletion, land and soil degradation, deforestation, pollution, and climate change, rather than natural variability alone. Water bankruptcy is the outcome of long-term anthropogenic drought, not just bad luck with hydrological anomalies.

• Water bankruptcy is about both quantity and quality. Declining stocks, polluted rivers, and degrading aquifers, and salinized soils mean that the truly usable fraction of available water is shrinking, even where total volumes may appear stable.

• Managing water bankruptcy requires a shift from crisis management to bankruptcy management. The priority is no longer to “get back to normal”, but to prevent further irreversible damage, rebalance rights and claims within degraded carrying capacities, transform water-intensive sectors and development models, and support just transitions for those most affected.

• Governance institutions must protect both water and its underlying natural capital. The existing institutions focus on protecting water as a good or service disregarding the natural capital that makes water available in the first place. Efforts to protect a product are ineffective when the processes that produce it are disrupted. Recognizing water bankruptcy calls for developing legal and governance institutions that can effectively protect not only water but also the hydrological cycle and natural capital that make its production possible.

• Water bankruptcy is a justice and security issue. The costs of overshoot and irreversibility fall disproportionately on smallholder farmers, rural and Indigenous communities, informal urban residents, women, youth, and downstream users, while benefits have often accrued to more powerful actors. How societies manage water bankruptcy will shape social cohesion, political stability, and peace.

• Water bankruptcy management combines mitigation with adaptation. While water crisis management paradigms seek to return the system to normal conditions through mitigation efforts only, water bankruptcy management focuses on restoring what is possible and preventing further damages through mitigation combined with adaptation to new normals and constraints.

• Water can serve as a bridge in a fragmented world. Water can align national priorities with international priorities and improve cooperation between and within nations. Roughly 70% of global freshwater withdrawals are used for agriculture, much of it by farmers in the Global South. Elevating water in global policy debates can help rebuild trust between South and North but also within nations, between rural and urban, left and right constituencies.

• Water must be recognized as an upstream sector. Most national and international policy agendas treat water as a downstream impact sector where investments are focused on mitigating the imposed problems and externalities. The world must recognize water as an upstream opportunity sector where investments have long-term benefits for peace, stability, security, equity, economy, health, and the environment.

• Water is an effective medium to fulfill the global environmental agenda. Investments in addressing water bankruptcy deliver major co-benefits for the global efforts to address its environmental problems while addressing the national security concerns of the UN member states. Elevating water in the global policy agenda can renew international cooperation, increase the efficiency of environmental investments, and reaccelerate the halted progress of the three Rio Conventions to address climate change, biodiversity loss, and desertification.

• A new global water agenda is urgently needed. Existing agendas and conventional water policies, focused mainly on WASH, incremental efficiency gains and generic IWRM guidelines, are not sufficient for the world's current water reality. A fresh water agenda must be developed that takes Global Water Bankruptcy as a starting point and uses the 2026 and 2028 UN Water Conferences, the conclusion of the Water Action Decade in 2028, and the 2030 SDG 6 timeline as milestones for resetting how the world understands and governs water.

Report Information

Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era, United Nations University Institute for Water, Environment and Health (UNU-INWEH), Richmond Hill, Ontario, Canada, doi: 10.53328/INR26KAM001

Support Paper

Madani K. (2026) Water Bankruptcy: The Formal Definition, Water Resources Management, 40 (78) doi: 10.1007/s11269-025-04484-0