Global Water Bankruptcy the New Reality

 

On January 20, 2026, the United Nations University's Institute for Water, Environment and Health (UNU-INWEH) released a report titled "Global Water Bankruptcy." The report warns that some regions of the world have surpassed temporary water stress  and crisis and entered a state of irreversible water bankruptcy—a condition in which they cannot return to previous water levels. The world is using up its water savings (groundwater, lakes, ecosystems and glaciers) and can not survive on the annual precipitation. Below I have excerpted some of the content and summarized the major points.

Loss of Wetlands and Transformation of Water Systems

Over the past fifty years, the world has lost approximately 410 million hectares of natural wetlands. Groundwater now supplies about half of all domestic water and more than 40% of water used for irrigation, directly tying both drinking water security and food production to rapidly depleting aquifers. Around 70% of the world’s major aquifers are experiencing long-term decline, and excessive groundwater extraction has caused significant land subsidence spanning over 6 million square kilometers. In these areas—including over 200,000 square kilometers of urban and densely populated areas where close to 2 billion people live—land is sinking by up to 25 centimeters per year, permanently reducing groundwater storage and increasing flood risk. 

The rate of decline in water reserves is only accelerating. The authors report that since 1990 more than half of the earth's major lakes have declined. Mankind has drastically exceeded the planet's capacity to provide clean fresh water. Using technology and mining groundwater created the illusion that the planet's abundance of fresh water was greater than it actually was. 

 Human intervention over the past century has drastically altered the global water cycle. Construction of dams, diversions, drainage works, and canals has transformed river systems. Changes in land use, elimination of forests, irrigation, and groundwater pumping have shifted evapotranspiration and recharge patterns. Greenhouse gas emissions have warmed the atmosphere and oceans, changing precipitation, snowpack, glacier mass balance, and the intensity of weather extremes. Population growth, urbanization, and economic development have escalated water demand for agriculture, industry, energy, and cities.

Alteration of River Systems and Wetland Loss

About one-third of global river basins now experience significant changes in flow, whether from human modification or climate shifts. In some of the world’s most densely populated river basins—including the Colorado, Indus, Yellow, Tigris–Euphrates, Murray-Darling, and São Francisco—environmental flows are routinely reduced or eliminated entirely, weakening ecosystems’ ability to recover. In many cases, the "normal" baseline to which crisis managers once hoped to return has effectively disappeared.

Wetlands, which act as the "shock absorbers" of the water cycle, are disappearing even faster than forests. Since 1970, about 35% of natural wetlands have been lost, with wetlands vanishing three times more quickly than forests. As wetlands disappear, their water-storage and drought-buffering functions are lost as well.

The drying of river corridors and wetlands interacts with heat and drought, intensifying wildfire risk. Reduced soil and vegetation moisture, drained peatlands, and decreased surface water buffer contribute to more frequent and severe wildfires, which in turn affect air quality, carbon emissions, and watershed function.

In Summary:

Global Water Bankruptcy Overview

• The world is experiencing a state of Global Water Bankruptcy, where water use over the long term exceeds renewable resources and safe depletion thresholds.
• This condition causes irreversible damage to water systems, affecting billions of people and threatening global stability.
• Water bankruptcy occurs when both renewable and non-renewable water resources are depleted beyond safe limits.
• Persistent water shortages have turned once-episodic droughts into permanent conditions in many regions.

Importance of Water for Development

• Water is fundamental to life. Growing populations and economic development drive increasing demand for water, impacting food security, public health, and environmental resilience.
• Water insecurity is a systemic risk that impedes progress toward the 2030 Agenda for Sustainable Development.

Consequences of Water Bankruptcy

• 2.2 Billion people lack access to safe drinking water and sanitation, with over 4 billion experiencing severe water scarcity each year.
• Major rivers and lakes are shrinking, wetlands are disappearing, and widespread groundwater depletion leads to land subsidence.

Global Water Crisis and Its Misconceptions

• The narrative of a global water crisis has dominated discussions for decades, focusing on shortages and competition for resources.
• Calling the situation a crisis suggests that improved management can restore past conditions, but many systems are already degraded beyond recovery.
• Human activities are reshaping the global water cycle and causing significant environmental changes.
• Major rivers are drying up, lakes are shrinking, and aquifers are being depleted, leading to chronic water shortages and declining water quality as demand continues to increase.

Shrinking Water Bodies Groundwater and Ecosystem Loss

• Over half of the world’s large lakes have declined since the early 1990s, affecting water security for nearly a quarter of the global population.
• Wetlands are disappearing at three times the rate of forests, causing significant biodiversity loss and economic costs.
• Mankind is using up the groundwater. Groundwater supplies about 50% of domestic water and more than 40% of irrigation globally, but many aquifers are being depleted faster than they can recharge.
• Land subsidence and salinization are direct results of unsustainable groundwater extraction, threatening infrastructure and increasing flood risks.

Lake Corpus Cristi in 2012 and 2025

Threats to Food Systems and Livelihoods

• Agriculture accounts for more than 70% of global freshwater withdrawals, with 3 billion people living in areas facing declining water storage.
• Water shortages result in food insecurity and economic shocks in many locations, especially in low- and middle-income countries where agriculture is the main source of income.

Global Water Bankruptcy: A New Reality

• The world is now confronting Global Water Bankruptcy, where long-term water use exceeds renewable inflows and safe depletion thresholds.
• Many human-water systems can no longer return to previous baselines, indicating a shift from crisis to a persistent state of failure.

Importance of International Cooperation

• The upcoming UN Water Conferences in 2026 and 2028 provide opportunities to recognize Global Water Bankruptcy and realign international priorities accordingly.
• Develop diagnostics to distinguish between water stress, crisis, and bankruptcy.
• Support vulnerable communities through fair transitions and equitable reforms. However, sharing is not an international strong suit. Governments are more likely to see their water resources as necessary for their citizens.