“In the same way that financial bankruptcy forces us to admit a harsh reality and accept that the current business model is no longer viable, water bankruptcy requires the same honest recognition. In many parts of the world, our existing development model and water governance systems have proven unsustainable and fundamentally dysfunctional,” said United Nations University Institute for Water, Environment and Health (UNU-INWEH) Director Kaveh Madani.
HUMANITY HAS PLUNGED into “water bankruptcy” or a situation where people and nations are consuming more water each year than the planet can replenish through natural means.
This is the finding of the United Nations University Institute for Water, Environment and Health (UNU-INWEH) in its report titled “Global Water Bankruptcy, Living Beyond Our Hydrological Means in the Post-Crisis Era” released last month.
Lead author and director of UNU-INWEH, Kaveh Madani, compared humanity’s behavior to spending without restraint and expecting savings to last forever, similar to reckless financial behavior.
“If we continue using more than what’s available or our natural income, then we have to go to our savings,” he said.
Madani also said that the current model or ecosystem to manage water resources is outdated.
“In the same way that financial bankruptcy forces us to admit a harsh reality and accept that the current business model is no longer viable, water bankruptcy requires the same honest recognition. In many parts of the world, our existing development model and water governance systems have proven unsustainable and fundamentally dysfunctional,” he added.
Madani pointed out that water overconsumption has come at the direct expense of nature itself—the stakeholder with no voice and no vote.
“As a result of this behavior, we are now seeing failing ecosystem components—wetlands that cannot restore themselves, aquifers that cannot recharge in the short term, retreating glaciers, extinct species, and many other signs of damage,” he explained.
He emphasized that water bankruptcy is not confined to poor or developing nations, as wealth offers no immunity when water budgets are ignored or abused.
“Like financial bankruptcy, you can be poor or rich. What matters is how you manage your budget. You can be rich and become bankrupt, and you can be poor and not become bankrupt,” Madani added.
“That’s why we see water bankruptcy problems appearing in
different parts of the world,” he said, adding that the report clearly identifies where these failures are unfolding.
THE TOLL OR DAMAGE
According to the report, since the 1990s, half of the world’s major lakes have been in measurable decline, despite the fact that these waters directly sustain 25 percent of the global population. This is not a marginal environmental shift—it is a direct assault on the water lifelines of billions. At the same time, nearly 410 million hectares of natural wetlands—an expanse almost equal to the European Union—have been wiped out over the past fifty years. With their destruction, ecosystems have lost their natural defenses against floods, their capacity to purify water, and their ability to sustain biodiversity. What took centuries to develop has been dismantled in decades.
The crisis runs even deeper underground. Half of all domestic water consumption worldwide depends on groundwater reserves, while more than 40 percent of irrigation draws from aquifers that are being drained with little regard for recovery. Seventy percent of major aquifers are now in long-term decline. This is not management—it is liquidation. Humanity is extracting water at a rate that nature cannot replenish, effectively mining a resource essential to survival as though it were expendable.
The report said that the financial and economic toll is just as unforgiving. Between 2022 and 2023 alone, 1.8 billion people endured drought conditions. The annual loss of wetland ecosystem services has been valued at an astonishing $5.1 trillion, while drought-related damages have surged to $307 billion per year. These figures expose the scale of the reckoning: environmental negligence is no longer just an ecological issue—it is an economic catastrophe unfolding in real time.
