Water underpins every aspect of our lives; an essential foundation for life on Earth. But the very system that sustains our lives is under immense pressure globally. Beyond just a crisis, researchers believe that we are now entering an era of water bankruptcy.

Entering the Era of Water Bankruptcy

Despite the global pledge to ensure water access for all, billions of people remain deprived of it. In 2022, around 2.2 billion people lacked safely managed drinking water, while 3.5 billion did not have access to safe and clean sanitation. Growing pressure means millions of others might be on track to reach those points. 

A report by the United Nations University Institute for Water, Environment, and Health (UNU-IWEH) states that almost 75% of the global population lives in water-insecure or critically water-insecure countries. The world is entering, as the report says, the era of global water bankruptcy.

What does it mean?

Water bankruptcy goes beyond ‘stress’ or ‘crisis’—two terms we might have become familiar with when talking about the issue. It refers to a state in which long-term water use has ‘bankrupted’ water resources, both renewable (from the hydrologic cycle of evaporation, condensation, and precipitation) and non-renewable (such as aquifers). 

Water bankruptcy is characterized by the irreversibility of the damage, where restoration is deemed infeasible. This damage occurs both in the quantity and quality of the water.

For instance, rivers, lakes, and wetlands around the world are drying up, while glaciers are melting quicker under the rising temperatures. At the same time, about 70% of the world’s major aquifers—underground water reservoirs—show long-term declining trends because of overextraction, and their quality has degraded due to contamination from saline, nitrate, and pesticides coming from industrial activities. 

The impacts strike the most vital sectors, such as agriculture. The report notes that about 3 billion people and over half of global food production are located in places that already experience declining water storage.

Reframing Governance

Reaching the point of beyond crisis means a reframing is needed in governing water and handling its era of bankruptcy. According to the report, this means admitting insolvency as it is, managing irreversibility with transparency, sharing unavoidable losses fairly, and designing institutions and pathways for continuous adaptation.

Ultimately, governance institutions must be able to protect not only the water reserves but also the cycles and natural capital that produce it. The report calls for a new water agenda—one that acknowledges water bankruptcy as a reality, recognizes local and global responsibilities, and aligns global priorities for the benefits of people and the planet.

Editor: Nazalea Kusuma

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