UNITED NATIONS, Jan 21 (IPS) – The world is already in a state of ‘water bankruptcy’. In many basins and aquifers, long-term overuse and degradation means that previous hydrological and ecological baselines cannot realistically be restored.
While not every river basin or country is water bankrupt, enough critical systems around the world have crossed these thresholds and are connected through trade, migration, climate feedbacks and geopolitical dependencies that the global risk landscape has now fundamentally changed.
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. The water failure should be recognized as a distinct post-crisis situation in which the accumulation of damage and overshoot has undermined the system’s ability to recover.
Water failure management must address insolvency and irreversibility. Unlike financial bankruptcy management, which deals only with insolvency, water bankruptcy management is concerned with rebalancing supply and demand under conditions where return to baseline is no longer possible.
Anthropogenic drought is central to the world’s new water reality. Drought and water shortages are increasingly caused by human activities, over-allocation, groundwater depletion, land and soil degradation, deforestation, pollution and climate change, and not just by natural variability. Water failure is the result of prolonged anthropogenic drought, and not just bad luck with hydrological anomalies.
Water bankruptcy is about both quantity and quality. Dwindling supplies, polluted rivers, diminishing groundwater aquifers and salinized soils mean that the actually usable fraction of available water is shrinking, even if total volumes appear stable.
Managing water failures requires a shift from crisis management to bankruptcy management. The priority is no longer on ‘getting back to normal’, but on preventing further irreversible damage, rebalancing rights and claims within reduced carrying capacity, transforming water-intensive sectors and development models, and supporting just transitions for those most affected.
Governing institutions must protect both water and the underlying natural capital. Existing institutions focus on protecting water as a good or service, without taking into account the natural capital that makes water available in the first place. Attempts to protect a product are ineffective when the processes that produce it are disrupted.
Recognizing the bankruptcy of water requires the development of legal and governance institutions that can effectively protect not only water, but also the hydrological cycle and the natural capital that makes its production possible.
Water bankruptcy is a matter of justice and security. The costs of overshoot and irreversibility have disproportionately borne smallholder farmers, rural and indigenous communities, informal urban dwellers, women, youth and downstream users, while the benefits have often accrued to more powerful actors. The way societies deal with water failures will shape social cohesion, political stability and peace.
Water failure management combines mitigation with adaptation. While water crisis management paradigms attempt to return the system to normal conditions through mitigation efforts alone, water failure management focuses on restoring what is possible and preventing further damage through mitigation combined with adapting to new standards and restrictions.
Water can serve as a bridge in a fragmented world. Water can align national priorities with international priorities and improve cooperation between and within countries. Roughly 70% of global freshwater extraction is used for agriculture, much of it by farmers in the South. Elevating water in global policy debates can help rebuild trust between South and North, but also within countries, between rural and urban, and between left-wing and right-wing constituencies.
Water should be recognized as an upstream sector. Most national and international policy agendas treat water as a downstream impact sector where investments are aimed at mitigating the imposed problems and externalities. The world must recognize water as an upstream opportunity sector where investments provide long-term benefits for peace, stability, security, equality, economics, health and the environment.
Water is an effective medium to fulfill the global environmental agenda. Investments in addressing water failure will bring major co-benefits to global efforts to address environmental challenges while addressing the national security challenges of UN member states.
Putting water on the global policy agenda could renew international cooperation, increase the efficiency of environmental investments and accelerate the halted progress of the three Rio Conventions in tackling climate change, biodiversity loss and desertification.
There is an urgent need for a new global water agenda. Existing agendas and conventional water policies, mainly focused on WASH, incremental efficiency gains and generic IWRM guidelines, are not sufficient for the current water reality in the world. A freshwater agenda should be developed that takes the 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 the way the world understands and governs water.
Global water bankruptcy: Living beyond our hydrological capabilities in the post-crisis era | UN University Institute for Water, Environment and Health (UNI-IN NIGHT) (January 20) (press release)
Backing paper
Madani K. (2026) Water Bankruptcy: The Formal Definition, Water Management, 40 (78) doi: 10.1007/s11269-025-04484-0)
IPS UN Office
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