The world has entered a state of global water bankruptcy, according to a new report by UN researchers. The concept of a “global water crisis” is no longer applicable, as the issue has evolved into a persistent shortage where water systems cannot return to their historical baselines. Kaveh Madani, Director of the UN University Institute for Water, Environment and Health, emphasized that the notion of “normal” is gone for much of the world.
The report highlights that the global water landscape has been fundamentally altered, with enough bankrupt or near-bankrupt systems interconnected through trade, migration, and geopolitical dependencies. The burdens of water scarcity fall disproportionately on vulnerable groups, including smallholder farmers, Indigenous Peoples, low-income urban residents, and women and youth. In contrast, the benefits of overusing water often accrue to more powerful actors.
The report introduces the concept of water bankruptcy, defined by insolvency and irreversibility. Insolvency refers to the depletion of water resources beyond renewable inflows and safe depletion limits, while irreversibility refers to the damage to natural capital, such as wetlands and lakes, that makes restoration infeasible. However, the report notes that bankruptcy is not the end of action, but rather the start of a structured recovery plan.
The world is rapidly depleting its natural water resources, with over half of the world’s large lakes declining since the early 1990s and around 35% of natural wetlands lost since 1970. Nearly three-quarters of the global population live in countries classified as water-insecure or critically water-insecure, with around four billion people experiencing severe water scarcity for at least one month each year. The economic toll is significant, with drought impacts costing an estimated $307 billion annually.
The report calls for a transition from crisis response to bankruptcy management, grounded in honesty about the irreversibility of losses and protection of remaining water resources. It emphasizes the need for policies that match hydrological reality rather than past norms. By acknowledging the severity of the situation and taking corrective action, it may be possible to mitigate the ecological damage and social conflict caused by water scarcity. The report’s findings underscore the need for urgent attention to the global water crisis and a commitment to sustainable water management practices.
