Planet Enters Era of ‘Global Water Bankruptcy,’ UN Report Says
The planet’s water reserves are overstretched and polluted, pushing the warming world into a dangerous condition of “water bankruptcy,” argues a new UN University report.
This is not an alarm bell for the future, the report states. Bankruptcy is present today. For water, the world is living beyond its means, draining its underground savings accounts, degrading its ecological foundations, and watching its rain and snow become less reliable and evaporate as the planet warms.
“Bankruptcy tells us that we already have passed this stage of a crisis and are already in a failure mode,” said Kaveh Madani, the report’s lead author.
The report favors monetary metaphors – savings accounts, cash flows, insolvency – to explain the state of the world’s water. A business files for bankruptcy when its liabilities are greater than its assets and it needs to restructure. The owners, in other words, admit that their business model has failed and current practices cannot continue.
The planet requires a similar reckoning for water, Madani argued. It is not enough to acknowledge that the planet’s water accounts – its aquifers, lakes, rivers, wetlands, and glaciers – are being drained. Leaders must recognize that new operating rules and ecological guardrails are necessary for life on a hotter planet in which water extraction has been the governing principle for decades.
“When we see insolvency combined with irreversibility, that defines the concept of water bankruptcy,” said Madani, who is also director of the United Nations University Institute for Water, Environment, and Health.
Madani calls this a “post-crisis” mindset – not attempting to resurrect a failed system but instead developing a relationship to water that prioritizes adaptability to an unstable environment while also ensuring justice for the world’s vulnerable people. Admitting failure and changing course, he said, is a way “to protect the future.”
When we see insolvency combined with irreversibility, that defines the concept of water bankruptcy.
The report details a planet that has veered off the rails. Thirty percent of global glacier mass has melted since the 1970s. In the same period, the world has plowed or drained more than a billion acres of wetlands, an area equal to the European Union. Seventy percent of the world’s major aquifers are in long-term decline. Water extraction from aquifers and rivers accelerated after the Second World War, and 70 percent of the supply goes into irrigated agriculture.
The loss of water in those savings accounts, when paired with other risks, presents a more worrisome picture, Madani said. Pollutants from industry, agriculture, and untreated human waste reduce the amount of high-quality water. Soils are degraded and accumulating salts. The number of water conflicts is rising. Rural water shortages have prompted an exodus toward cities. Meanwhile, inadequate infrastructure investment means that 2.1 billion people do not have clean water at home and 3.4 billion do not have safe sanitation.
It is perhaps not surprising that the Eurasia Group named water conflict as one of its top political risks of 2026.
Madani, who was deputy head of Iran’s environment department in 2017-18, has been using the bankruptcy language since at least 2021 to describe his home country’s dire water situation. Tehran, whose reservoirs are frightfully low, is the latest city to face the prospect of a Day Zero scenario of dry taps.
To reduce the risk of conflict and shortages, the report recommends a wholesale restructuring. Governments could trim water rights and water claims to more align demand with supply and rebuild institutions that allow for continuous adjustment in an unstable environment. Madani acknowledged that reforms at such scale will not be easy, but they ought to be embraced widely because all areas face risks.
“What matters is how you manage your budget, not how rich you are,” he said. “So you can be poor and not get bankrupt and you can be very rich and get bankrupt if you don’t adjust your lifestyle according to your budget.”
All of these changes need to be rooted in justice, argued Madani, who sees a world cleaved in two. Richer areas with diversified economies are better positioned to withstand water shocks. California, for example, which weathered a deep drought in 2014-15. On the other side are poorer societies whose livelihoods are inseparable from farming. Water shortages hit these areas hard. Madani said economic transformation toward less water-intensive jobs is essential for social, political, and ecological durability.
Despite the daunting outlook, Madani views bankruptcy as a fresh start and a way to position water as a bridge-building issue that crosses political chasms.
“We are not naive about the problems of the international world or the diplomatic world,” Madani said. “But at the same time, we think that it is possible to think about water differently, to tell stories that are different, to tell stories that are less dividing, if they are more inclusive and are reflective of the concerns of the Global South, and if we do so, then we can earn their trust and bring them to the negotiations table and do a better job together.”
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