Global Water Bankruptcy

Published on the occasion of UNU-INWEH’s 30th anniversary, and ahead of the 2026 UN Water Conference, this flagship report, Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era, argues that the world has entered a new stage: more and more river basins and aquifers are losing the ability to return to their historical “normal.” Droughts, shortages, and pollution episodes that once looked like temporary shocks are becoming chronic in many places, signalling a post-crisis condition the report calls water bankruptcy.

The report makes the case for a fundamental shift in the global water agenda—from repeatedly reacting to emergencies to “bankruptcy management.” That means confronting overshoot with transparent water accounting, enforceable limits, and protection of the water-related natural capital that produces and stores water—aquifers, wetlands, soils, rivers, and glaciers—while ensuring transitions are explicitly equity-oriented and protect vulnerable communities and livelihoods.

Crucially, the report frames water not only as a growing source of risk, but also as a strategic opportunity in a fragmented world. It argues that serious investment in water can unlock progress across climate, biodiversity, land, food, and health, and serve as a practical platform for cooperation within and between societies. Acting early, before stress hardens into irreversible loss, can reduce shared risks, strengthen resilience, and rebuild trust through tangible results.

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What water bankruptcy looks like in real life

In financial bankruptcy, the first warning signs often feel manageable: late payments, borrowed money and selling things you hoped to keep. Then the spiral tightens.

Water bankruptcy has similar stages.

• At first, we pull a little more groundwater during dry years. We use bigger pumps and deeper wells. We transfer water from one basin to another. We drain wetlands and straighten rivers to make space for farms and cities.
• Then the hidden costs show up. Lakes shrink year after year. Wells need to go deeper. Rivers that once flowed year-round turn seasonal. Salty water creeps into aquifers near the coast. The ground itself starts to sink.
• That last one, subsidence, often surprises people. But it’s a signature of water bankruptcy. When groundwater is overpumped, the underground structure, which holds water almost like a sponge, can collapse. In Mexico City, land is sinking by about 10 inches (25 centimeters) per year. Once the pores become compacted, they can’t simply be refilled.