A new UN report argues the world has entered a critical new stage where more river basins and aquifers are losing the ability to return to normal, a post-crisis state it labels water bankruptcy.
The irreversible water bankruptcy will see billions of people struggle to cope with decades of overuse and shrinking supplies from natural water sources.
Nearly three-quarters of the world’s population live in countries the report labels water insecure.
“Many regions are living beyond their hydrological means, and many critical water systems are already bankrupt,” said the report’s lead author, Kaveh Madani.
Madani says that by labelling the crisis and recognising the water reality, hard choices and intervention to protect people, economies and ecosystems can finally be made.
The report, ‘Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era’, says water supplies are already in a post-crisis state of failure.
More than three billion people — and over half of the world’s food production — are concentrated in regions where water storage levels are already unstable or declining, it said, while salinisation has also degraded more than 100 million hectares of cropland.
Not every basin is water bankrupt, but 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.”
Some experts see this report as a turning point in public awareness of water management.
“The report’s diagnosis of an emerging era of water bankruptcy is both timely and persuasive, and the concept itself usefully reframes global water scarcity as a systemic failure rather than a temporary crisis,” says Dr Paul Hutchings, Associate Professor in Water, Sanitation and Health, and Associate Director of Water at the University of Leeds.
But he adds that action will require accountability and difficult decisions from those in power.
“The analysis would also benefit from greater engagement with limited public water literacy and the erosion of trust in public institutions as barriers to progress, particularly in high-consuming contexts in the Global North, where some of the largest water demands are generated but remain least visible and acknowledged.”
Prof Alan MacDonald, Head of Groundwater at the British Geological Survey, says the report could be more optimistic.
“There is huge variability in the state of the world’s rivers, lakes, and groundwater. Whilst the report successfully highlights all that is wrong, it misses some of the causes for hope,” he says.
“Not all regions are running out of water. In sub-Saharan Africa, groundwater levels are mostly stable or rising, so concern about ‘water bankruptcy’ should not stop efforts to bring water to the estimated 400 million without access to even a basic water supply.”
He says there are also examples worldwide of aquifers and rivers recovering after periods of degradation.
“It’s vital that reference to bankruptcy does not lead to malaise through despair and instead acts as a catalyst for increased action.”
A global issue
The report’s global statistics highlight the scale: half of the world’s large lakes have lost water since the 1990s, 70% of major aquifers show long-term decline, and hundreds of millions of people live on sinking ground.
“Millions of farmers are trying to grow more food from shrinking, polluted, or disappearing water sources,” Madani says. “Without rapid transitions toward water-smart agriculture, water bankruptcy will spread rapidly.”
He argues that the water crisis cannot be solved by treating it as a one-sector problem. He says water cannot be protected if the hydrological cycle, the climate, and the natural capital that generates freshwater are disrupted or damaged, and warns that the world is still not acting on a major strategic opportunity to change course.
“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.”
The warning signs are already concentrated in hotspots. In the Middle East and North Africa, extreme water stress collides with climate vulnerability, low farm productivity, energy-hungry desalination, and worsening sand and dust storms.
Across parts of South Asia, groundwater-reliant farming and rapid urbanisation are driving long-term drops in water tables and even sinking land.
In the American Southwest, the shrinking Colorado River system has become a symbol of water promises that no longer match reality.
If nothing changes, water bankruptcy might become a new global norm.
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