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UN Warns the World Has Entered an Era of “Water Bankruptcy"

Libby Miles's profile
By Libby Miles
January 26, 2026
UN Warns the World Has Entered an Era of “Water Bankruptcy"

The United Nations University’s Institute for Water, Environment, and Health (UNU-INWEH) recently released a major study that has concluded that the world has gone from a state of temporary “water stress” into a more severe state known as “water bankruptcy.”

Per the UN report, water bankruptcy has two key components. Insolvency, which refers to a state in which water use and pollution exceed safe limits and renewable flows, and irreversibility, which means that many ecosystems, like wetlands and lakes, can no longer return to previous conditions.

If you’re unsure of what water bankruptcy means for the environment and humanity, keep reading to find out more.

How Widespread the Problem Has Become

The scale of the issue is perhaps the most troubling part of the study. Nearly 75% of the world’s population, a figure that represents more than 6 billion people, is impacted by the ongoing crisis. Those members of the population live in areas classified as water insecure or critically water insecure. Of that number, roughly 4 billion people face severe water scarcity for at least one month out of each year. These figures reflect shortages in everything from drinking supplies to irrigation water needed for food production.

According to the data, some of the world’s largest lakes are shrinking, rivers are struggling to reach the sea, and key global aquifers are being tapped faster than rainfall and snowmelt can replenish them. Even wetlands, which naturally slow floods and filter water, have declined dramatically.

The problem isn’t limited to traditional bodies of water. Glaciers, which provide a critical source of meltwater in dry seasons, have lost more than 30% of their mass since 1970. When all of this information is put together, it means that hundreds of millions of people now live in cities where water tables are sinking because groundwater is being pulled out too quickly.

Why Has Water Become So Scarce?

For years, you have probably heard that 75% of the Earth’s surface is covered in water. While it’s certainly true that bodies of water cover most of the surface, it’s important to realize just how little of this water is usable for humans, animals, and farming. Some 97% of the Earth’s water is saltwater, which is undrinkable and virtually unusable for irrigation. When you recognize that only approximately only 3% of the Earth’s water is usable, the water drought becomes even more troubling.

Scientists agree that overextraction is the primary cause of the drought. Human withdrawals for agriculture, industry, and urban use have exceeded natural renewal rates in many basins. Additionally, climate change has led to an increase in temperatures, which is amplifying droughts, reducing snowpack, and expediting glacial melt. Additionally, higher global temperatures alter rainfall patterns, which dries out some regions and impacts existing water systems.

This diagram breaks down “water income” and “water expenses” in a human water system. Water bankruptcy sets in when long-term overuse and pollution push water demand beyond available supply, and the resulting ecosystem damage becomes irreversible, weakening the natural systems that keep the water cycle stable. Source: United Nations University Institute for Water, Environment and Health (UNU-INWEH), Global Water Bankruptcy report.
Credit: Water bankruptcy happens when long-term water use and pollution outpace available supply, causing irreversible damage to the natural systems that keep water flowing. (UNU-INWEH), Global Water Bankruptcy report)

Pollution is also a major concern. Contaminated water supplies are essentially removed from safe use, which reduces the amount of clean freshwater available to people, animals, and crops. Finally, dams, drainage of wetlands, and land-use change have diminished the natural infrastructure that once regulated water flows and stored reserves.

The Real-World Impact on People and Food

Water bankruptcy isn’t just an environmental concept. It also has a very tangible impact on the systems that sustain human life on the planet. Agriculture uses roughly 70 % of all freshwater withdrawals, and declining water supplies threaten more than half of global food production. When water runs short, crop yields fall, and food prices typically increase. This is especially troubling for those who are already dealing with food insecurity.

Energy infrastructure also stands to be impacted by global water scarcity. Hydroelectric power generation suffers without reliable river flows, and water shortages can depress industrial output and livelihoods. Finally, there are concerns about sanitation. Around 2.2 billion people lack safely managed drinking water, and 3.5 billion lack safely managed sanitation. Those conditions worsen when water becomes scarce.

What Experts Say About Possible Responses

This global map shows where water risks are most severe, based on combined measures of supply strain, water quality, and policy or reputational pressures, underscoring why solutions must be regional and coordinated. Source: United Nations University Institute for Water, Environment and Health (UNU-INWEH), Global Water Bankruptcy report, using Aqueduct 4.0 data.
Credit: This map highlights regions facing the highest combined water risks, showing why global solutions must be coordinated and region specific. (UNU-INWEH)

The UN committee didn’t simply publish bad news. They also offered solutions. However, those solutions require coordinated policies, sizable investments, and behavioral changes on a global level. One of the most notable solutions presented in the report involves reforms to governance and water pricing. Charging appropriately for water and regulating withdrawals can reduce waste and reflect real scarcity values. Other potential solutions included agricultural reform, ecosystem protection, and innovations in technology.

When considering global water scarcity, it’s easy to feel like there’s nothing that you can do. While you may not be able to solve the problem on a large scale, there are steps that you can take to minimize the amount of freshwater that you’re tapping into. Spend some time evaluating how much water you’re using, and look for opportunities to make adjustments. While you cannot resolve water scarcity on the other side of the world, you can make minor adjustments to your daily routine.

The world’s water scarcity issue isn’t going away. However, there is hope, but it requires a concerted effort to improve stewardship from around the world.


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