While eyes have been fixed on stock markets, currency fluctuations, and political headlines, a recent United Nations report sounded an alarm that many missed. The planet, it said, had entered a new phase of “water bankruptcy”. This is not water scarcity, perhaps owing to the seasons, or to a bad year, and these are not short-term shortages or manageable droughts. This is the industrial pilfering of the world’s natural water reserves built up over many thousands of years, now being consumed at a rate that nature cannot restore.
The UN University Institute for Water, Environment and Health (UNU-INWEH) details the catastrophe: lakes that have lost half their volume, rivers that no longer reach the sea, cities sinking as aquifers collapse beneath them. If it is not already, water bankruptcy will soon shape geopolitics, threaten food security, and place billions in jeopardy. If entire water systems have lost the ability to recover, this is now a structural crisis, converging with the effects of global warming, unsustainable agricultural expansion, pollution, deforestation, population explosions, and resource mismanagement. It is a perfect storm.
The report, titled Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era, calls for an urgent and serious response, dismissing rhetoric and the illusions of easy solutions. Old terminology (such as ‘water stress’) suggests disruption, not collapse. It calls for a new conceptualisation that includes water as natural capital and hydrological wealth. That wealth is draining, literally. Rivers, aquifers, lakes, and snowpacks have disappeared, unlikely to return. If terms are sought, this is now a “post-crisis” era. In terms of water management, recovery is no longer possible—but mitigating further loss and preventing full system failure still is.
Permanent depletion
To convey the scale, the INWEH report employs a financial analogy. Just as nations or companies may exceed their means by depleting reserves, societies have begun living beyond their hydrological capacity. Water bankruptcy occurs when withdrawals (from rivers and aquifers) consistently exceed nature’s ability to renew them. The result is a permanent depletion of strategic reserves—lakes, wetlands, glaciers—that future generations will need for survival.
The broad ecological framework includes groundwater reserves, glaciers, wetlands, fertile soils, and forests. All sustain the water cycle, a component of the planet’s natural infrastructure. The loss of one element has repercussions on the others. It disrupts the world’s hydrological balance and weakens an ecosystem's resilience, reducing its future water-generating capacity.
One visible sign is the drying of major river deltas. Dozens no longer reach the oceans year-round due to excessive withdrawals and unregulated dam construction. When a river can no longer complete its course, estuarine ecosystems collapse. The balance between freshwater and seawater breaks down, surrounding farmland becomes saline, and fisheries disappear. The rupture is profound and enduring.
Groundwater is the “great casualty” in this, says the INWEH. Half of the world’s drinking water and 40% of its irrigation water is drawn from the ground, but so much has now been drawn that there is a long-term decline of 70% in the planet’s largest aquifers. The depletion cannot be seen, but the resulting subsidence across cities and agricultural plains can. Some cities are sinking by several centimetres per year, threatening the stability of buildings, disrupting sewage systems, and weakening flood defences.
Moreover, the remaining reserves are now becoming increasingly saline and contaminated from heavy metals. Even in scientists’ best-case scenarios, natural replenishment of these aquifers would take centuries. Nearly half of the world’s major lakes—vital to a quarter of the global population—have seen their volumes significantly reduced since the early 1990s. This means less drinking water, less fish, and mounting tensions between communities and nations.
A global problem
Climate change raises the risks, but consumption patterns are the main driver towards collapse. This in part stems from short-sighted agricultural and industrial policies, and the flawed separation of water management from land, energy and food systems, which has allowed over-extraction to continue unchecked. Moreover, this is a truly global problem. Water bankruptcy spans continents and income levels, with depletion in both developed and developing regions. The pace may vary, but the pattern remains.
Wetlands, the first ecological buffer in the water cycle, have shrunk by 410 million hectares over the last 50 years. Water flows have grown increasingly erratic, swinging between extreme floods and prolonged droughts. Glaciers have lost 30% of their mass since 1970. But the damage is most severe in rivers no longer reaching the sea, eroding estuaries and pushing salt into fertile lands. Already, more than 100 million hectares have been affected by intensive irrigation and poor drainage.
The report estimates the cost of lost ecosystem services—primarily from wetland destruction—at a staggering $5.1tn. Today, four billion people face severe water scarcity for at least one month each year. Two billion live on land that is slowly sinking. More than half of the world’s food comes from regions under extreme water stress, where disruptions could trigger global food crises with significant impacts. Water underpins health, housing, and livelihoods.
Across the world, farmers face disappearing water and mounting debts. Some are abandoning their land because they cannot water their crops to make ends meet. In areas where water must be carried miles every day, women and girls take the brunt. For the young, this task is often prioritised over education. A lack of water also drives internal displacement and cross-border migration. Nearly 1.8 billion people now live under conditions of chronic drought. This puts pressure on health systems and can deepen inequality, given that wealthier households can drill deeper.
