UN Warns of Global Water Bankruptcy as Risks Mount

The world has entered an era of global water bankruptcy, according to a landmark report by the United Nations University (UNU), warning that human demand has irreversibly depleted water reserves in several critical systems and pushed parts of the global hydrological cycle beyond recovery. The report states that the issue is no longer whether water crises can be avoided everywhere, but how governments and industries can manage a world in which many water systems have already failed.

“Many regions have lived far beyond their hydrological means. It is like having a bank account where money is withdrawn every day without a single deposit coming in. The balance is already negative,” said Kaveh Madani, Director, UN University Institute for Water, Environment and Health (UNU-INWEH) and lead author of the report. 

The assessment describes a shift from water insecurity to outright bankruptcy, defined as the persistent overextraction of surface and groundwater relative to renewable flows and safe depletion levels, resulting in irreversible or prohibitively costly losses of water-related natural capital. Unlike water stress or temporary crises, water bankruptcy refers to systems that have crossed points of no return.

By the numbers, the report underscores the scale of the challenge: 75% of the global population lives in countries where water is scarce or unsafe, more than half of the world’s large lakes are shrinking, around 2 billion people reside on land affected by subsidence caused by groundwater overexploitation, and roughly 410M ha of natural wetlands, an area nearly equivalent to the size of the European Union, have disappeared over the past five decades.

Agriculture sits at the center of the collapse, consuming about 70% of global freshwater withdrawals. When crops fail in one region, the effects spread through global food prices and supply chains, undermining food security and economic stability elsewhere. “The water that is missing here shows up in the food over there. This bankruptcy is not a local problem; it is a systemic risk that flows through the veins of global trade,” Madani said.

The report also highlights interconnected drivers of the crisis, including chronic groundwater depletion, water over-allocation, land and soil degradation, deforestation, pollution and greenhouse gas emissions linked to climate change. Globally, 50% of domestic water use now depends on groundwater, more than 40% of irrigation water pumped from aquifers is being depleted unsustainably, and 70% of major aquifers show long-term declines. 

While the report frames the challenge as global, experts stressed that impacts vary by country. In Mexico, specialists said the nation is not yet in full water bankruptcy but faces critical conditions, particularly in central and northern regions. “I would not describe Mexico as being in water bankruptcy as such, but rather facing extreme scarcity challenges. The fact that there is no water does not mean activities must stop; it means water must be used efficiently,” said Eduardo Vázquez, Executive Director, Agua Capital.

Vázquez warned that conditions are deteriorating faster than expected. “I have been in the sector for 20 years and I can’t believe how much the environment has changed in just the past five years,” he said, noting that 77% of Mexico’s population lives in regions where water availability is lowest. He added that industrial water use is often overstated, as industry accounts for about 5% of total consumption and generally applies best management practices, while agriculture remains the largest user.

Raúl Rodríguez, President, National Water Advisory Council, said water has become the country’s second most significant national risk after insecurity, even if it is not yet widely perceived as such. He urged policymakers to avoid politicizing the issue and focus on implementation. “The country is already overdiagnosed. We know what needs to be done; what’s missing is execution,” he said.

The UN report was released ahead of preparatory meetings for the 2026 UN Water Conference, to be co-hosted by the United Arab Emirates and Senegal. It calls for managing water bankruptcy rather than reacting to isolated crises, including transforming agriculture, equitably allocating a shrinking resource and protecting remaining ecosystems that still generate water.

“Some systems are already beyond recovery. But we can still protect every remaining drop and learn how to live with the water we have left,”  Madani said.