Global Water Bankruptcy

Water is fundamental to sustainable development, human well-being, and planetary health. When water systems fail, the effects are swift and far-reaching: harvests decline, energy systems are disrupted, public health is endangered, cities become increasingly unlivable, livelihoods are lost, communities are displaced, tensions escalate, and the foundations of peace and stability are undermined. In the context of climate change, biodiversity loss, land degradation, and growing inequalities, water insecurity has emerged as a systemic risk that increasingly constrains progress across the entire 2030 Agenda for Sustainable Development.

The United Nations University Institute for Water, Environment and Health (UNU-INWEH) has just issued a major report, Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era, warning that the water crisis is already upon us. The following are its major conclusions.

The planet has entered the Global Water Bankruptcy era. In many basins and aquifers, long-term water use has exceeded renewable inflows and safe depletion limits, and parts of the water and natural capital—rivers, lakes, aquifers, wetlands, soils, and glaciers—have been damaged beyond realistic prospects of full recovery.

Billions remain water insecure. Nearly three-quarters of the world’s population lives in countries classified as water-insecure or critically water- insecure. Around 2.2 billion people still lack safely managed drinking water, 3.5 billion lack safely managed sanitation, and about 4 billion experience severe water scarcity for at least one month a year.

Surface waters are shrinking at scale. A growing number of major rivers now fail to reach the sea or fall below environmental flow needs for significant parts of the year. More than half of the world’s large lakes have lost water since the early 1990s, affecting around one-quarter of the global population that depends directly on them for water security.

Wetlands have been liquidated on a continental scale. Over the past five decades, the world has lost roughly 410 million hectares of natural wetlands—almost the land area of the European Union—including an estimated 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, roughly equivalent to the combined annual GDP of about 135 of the world’s poorest countries.

Groundwater depletion and land subsidence are widespread and often irreversible. Groundwater now provides about 50% of global domestic water use and over 40% of irrigation water, tying both drinking water security and food production directly to rapidly depleting aquifers. Around 70% of the world’s major aquifers show long-term declining trends. Excessive groundwater extraction has already contributed to significant land subsidence over more than 6 million square kilometers—almost 5% of the global land area—including over 200,000 square kilometers of urban and densely populated zones where close to 2 billion people live. In some locations, land is sinking by up to 25 centimeters per year, permanently reducing storage capacity and increasing flood risk.

Cryosphere loss is liquidating critical “water savings”. The world, in multiple locations, has already lost more than 30% of its glacier mass since 1970. Several low- and mid-latitude mountain ranges risk losing functional glaciers within decades, undermining the long-term security of hundreds of millions of people who rely on glacier- and snowmelt-fed rivers for drinking water, irrigation, and hydropower.

Agricultural heartlands are running down their water capital. Roughly 70% of global freshwater withdrawals are used for agriculture. Around 3 billion people and more than half of the world’s food production are located in areas where total water storage—including surface water, soil moisture, snow, ice, and groundwater—is already declining or unstable. More than 170 million hectares of irrigated cropland—roughly the combined land area of France, Spain, Germany and Italy—are under high or very high water stress.

Land and soil degradation are amplifying water-related risks. More than half of global agricultural land is now moderately or severely degraded, reducing soil moisture retention and pushing drylands toward desertification. Salinization alone has degraded roughly 82 million hectares of rainfed cropland and 24 million hectares of irrigated cropland—together more than 100 million hectares of cropland—eroding yields in some of the world’s key breadbaskets.

Drought is increasingly anthropogenic and extremely costly. Over 1.8 billion people were living under drought conditions in 2022–2023. Drought- related damages, intensified by land degradation, groundwater depletion and climate change rather than rainfall deficits alone, already amount to about US$307 billion per year worldwide—larger than the annual GDP of almost three-quarters of UN Member States.

Water quality degradation is shrinking the truly usable resource base. In many basins, pollution from untreated or inadequately treated wastewater, agricultural runoff, industrial and mining effluents, and salinization means that a growing share of water is no longer safe or economically viable for drinking, food production or ecosystems—even where nominal volumes have not yet declined dramatically.

The planetary freshwater boundary has been transgressed. Global evidence shows that two important elements of the freshwater cycle—“blue water” (surface and groundwater) and “green water” (soil moisture)— have been pushed beyond a safe operating space, alongside planetary boundaries for climate, biosphere integrity, and land systems.

Existing governance and agendas are no longer fit for purpose. In many basins, the sum of legal water rights, informal expectations and development promises far exceeds degraded hydrological carrying capacity in the absence of effective governance institutions to address water bankruptcy. The current global agenda focused primarily on WASH (Water, Sanitation, and Hygiene), incremental efficiency gains and generic IWRM (Integrated Water Resources Management) prescriptions is insufficient to address structural overshoot, irreversibility and the rising risks of social instability and conflict associated with water bankruptcy.

From a governance perspective, "bankruptcy" is the critical term, as it acknowledges a resource that is beyond repair and cannot be restored in a reasonable time frame. There are escalating emergency costs, deepening ecological damage, and rising social conflict and inequality. Much of the discussion is on principles of governance that need to be applied when sharing a limited resource that cannot meet previous expectations. This requires participatory local and regional consultation, acknowledging rather than denying irreversible losses and overshoot, prevention of further damage as an explicit priority not a by-product, rebalancing claims and expectations to match degraded carrying capacity, deliberate adaptation to new normals, including social, economic, and spatial adjustments, and adopting justice-oriented approaches that distribute unavoidable losses fairly and protect the most vulnerable.

In terms of geographic scale, much of the report refers to the water catchment or river basin level, but there is a section on shared transboundary water resources and common aquifers, and the necessary international collaboration, acknowledging that international agreements that previously assumed a stable resource must be modified or renegotiated. The report says it is essential to prevent hydrological insolvency and irreversibility from becoming a driver of broader geopolitical instability.

REFERENCE: Madani K. (2026) 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

SOURCE: https://collections.unu.edu/eserv/UNU:10445/Global_Water_Bankruptcy_Rep…