‘First thing to do when solving water problems is to understand diversity’

A new report by the United Nations University — Institute for Water, Environment and Health issued a stark warning: The world's water systems are no longer under stress, they are failing. Published ahead of the 2026 UN Water Conference, Global Water Bankruptcy: Living Beyond Our Hydrological Means in the Post-Crisis Era argues that many rivers, aquifers and wetlands have crossed thresholds beyond which recovery to historical “normal” conditions is unlikely. Drawing on global data, they observed that what once appeared as temporary droughts, shortages or pollution shocks have become chronic features.

At the heart of the report is the concept of “water bankruptcy”, a term that reframes water scarcity as a systemic failure caused by prolonged overuse, ecological damage and climate disruption. In an interview with Down To Earth, Kaveh Madani, director of United Nations University Institute for Water, Environment and Health and lead author of the report, explained why existing vocabularies fall short, how climate change and mismanagement intersect and what a shift towards equity-focused “bankruptcy management” could mean for water governance worldwide.

Akshit Sangomla (AS): One term that has been used in the report and features in the title is ‘water bankruptcy’. We have known terms such as ‘water stress’ or ‘water crisis’ but ‘water bankruptcy’ is something new. What prompted you to use the term?

Kaveh Madani (KM): This is a very long story but some of the familiar terms that we know do not necessarily let us see a phenomenon that is happening. The moment you hear ‘water bankruptcy’, you understand that we are talking about a mismatch between the available water and the water that is being consumed or demanded.

When you talk about ‘water scarcity’, is it scarce because of natural scarcity, is it scarce because you have overused it, is it scarce because you do not have infrastructure to use it?

A crisis state is when we are very worried, its a deviation from the normal and it's a shock. When we are in a crisis we are still hopeful that we can mitigate and fix the problem. Therefore, these terms do not reflect what we are speaking about in this report.

Here, we are talking of a state of failure that happens after the crisis state. The failure has occurred because for so long we have used more water than the available water that has also damaged our ecosystems.

Our check-in account, which included surface water in the form of rivers, lakes and other land reservoirs, are empty and climate change is making our income smaller, which is in the form of decreased precipitation.

Our savings account in the form of groundwater has been drained. So the check-in account is empty, the savings account is empty but the demand for water in the form of farmers, cities, data centres and power plants is out there. The demand is there but the supply has been declining because of our bad water management decisions and climate change together.

Initially this could work as we take loans or steal from nature. But after a while, this is not going to be sustainable. The system starts collapsing. Your rivers become smaller or polluted, lakes and wetlands go dry, groundwater starts declining, you have land subsidence, sinkholes, desertification, sand and dust storms, wildfires, biodiversity loss and glacial melting leading to floods.

When you are dealing with a new normal that is chronic and not going back, you need to rethink even your terminologies and understand that the situation we are dealing with here is a failure state. It is sad but needs to be accepted honestly like a person facing bankruptcy to avoid further damages.

The report argues that by understanding and appreciating the state of ‘water bankruptcy’, we can still salvage what we can fix and prevent further damages. But we also have to admit that there is a new normal and new limits that we have to redefine our operations, different from what used to happen. 

AS: The report talks about the degradation, depletion and mismanagement of all major freshwater sources. Which are the ones you are most concerned about and need to be saved and managed urgently?

KM: One thing that the report tries to do is not discriminate among the components of the water system as it could be a misleading approach. You go across India, the water problems are different. You have water quality issues, groundwater issues, flooding issues so the problems at hand are diverse.

The report talks about the different manifestations of ‘water bankruptcy’. In some places it is the glaciers, some places it is the farmers, some places it is the reservoirs that face the impacts. So you cannot be concerned about one over the other. You need to be concerned about all of them, because once the water sources are damaged it is irreversible. This would impact everything from national security, to the lives of communities and the lives of future generations.

The impact would also be global. A lot of countries in the world are importing food from India. So the issue of Indian farmers is not theirs alone but it is also the issue of food security globally.

The report talks about the fact that we have not thought about the serious problems that we are dealing with and that we need to come up with a new agenda that is fit for purpose. Water quality and quantity are on one side but there is also a machinery of water production through the climate system with many components. If they are affected, the water system would be affected. Protecting water is also thinking about protecting forests, wetlands, species and the climate system. Protecting water is also about protecting the processes that produce water. 

AS: What role has global warming and consequent climate change played in the world reaching a state of ‘water bankruptcy’ and what was the part played by mismanagement of water resources?

KM: The report says that the water system is a non-linear system. It is very hard to attribute a particular portion to a particular element. Say you are a person who doesn’t take care of your diet, you eat red meat, you don’t exercise, you smoke and this has happened for decades. Then say you also get fired from your job after which you have a heart attack. It would be very difficult to attribute the heart attack to your lifestyle or the recent shock of losing your job. They are interconnected factors that are reinforcing each other.

Climate change has made water limited in major parts of the world. It has also shifted patterns of precipitation from snow to rain, amount and frequency. Climate change has also melted glaciers and generally disrupted the hydrological cycle.

We have built our dams, reservoirs and our transboundary water treaties based on historical conditions that no longer hold. This is because of climate change, land use change and other factors. But climate change did not decide how much farming India wants to have, or Saudi Arabia wants to have or the United States wants to have; it did not tell us where to place our cities. Climate change is a causing catalyst but it is more impactful in some places and less impactful in others.

Climate change affects the water system but water system also affects climate change, so we are dealing with loops here. If the rivers and wetlands shrink there is a feedback effect leading to phenomenon like heat islands in cities. It is easy sometimes to forget about these interconnections and favour one over the other because it fits our narrative. It is easier for a decision-maker to say the issue is due to climate change and blame the industrial economies as they do not want to take responsibility for the problem.

The report also says climate change can exacerbate water quality issues but if you have water on paper but your rivers and other sources are polluted or salinised, water availability reduces. ‘Water bankruptcy’ is not just an issue for the Global South, even countries with advanced economies are facing the issues. It does not even matter if a country is water-rich or water-poor, if you do not manage your water well, you get into trouble. 

AS: What are the precedents to this era of ‘water bankruptcy’? Have nations or communities anywhere in the world faced this before?

KM: The report says we are in the ‘Water Bankruptcy’ era when more and more water systems around the world are going into a state of irreversibility. ‘Water bankruptcy’ results from both insolvency and irreversibility. In some places we might be in the insolvency situation but not irreversible but in some other places where the insolvency has been there for a long time, irreversibility has emerged.

There is plenty of evidence for this from many places. In places where there has been major groundwater decline, for instance, you cannot fix that overnight or even in human timescales. The evidence also comes from places where a major lake is going dry, such as the Aral Sea between Kazakhstan and Uzbekistan, Lake Urmia in Iran and Lake Chad in north-central Africa.

We have also seen Day Zero episodes in Chennai, Cape Town, Tehran, Sao Paulo and Mexico City. We are witnessing many basins suffering from land subsidence with the development of sink holes such as happened recently in Turkey. There is also increased desertification and sand and dust storms in many places.

We need to be careful about calling a nation water bankrupt, although some are. The first thing to do when solving water problems is to understand diversity. We need to understand that geographies, socio-economic conditions are very different among countries. A problem that may look like a stress or as severe in one place may not appear to be a stress or as severe in another place.

The very definitions of water stress severity could be different from one place to another. These problems are being faced by many regions and at least some of them within my lifetime may not bounce back to normalcy. There are also some places where we do not know how to bring back some systems physically such as in the case of land subsidence. 

AS: Are there some good water governance or conservation examples from around the world that give hope and inspire?

KM: ‘Water bankruptcy’ is bitter and painful, but admitting it can be a good strategic move. The report discusses how we should manage this process of bankruptcy and governance.

Something we always recommend is that every place has its own story, socio economic conditions and geography. So, we have to be careful about just copying one thing from one country and implementing it in our country. The outcomes may not be necessarily the same. There are best practices to learn from.

We have to be mindful that the issues of water scarcity and bankruptcy would remain there as long as human beings are on this planet or even other species. These are in a class of complex problems. The trade-offs and uncertainties are essential characteristics of resource management problems.

You will make some mistakes but what matters is making the mistakes that are not totally irreversible and leaving some chance of fixing things in the future. Even if you are seeing a system that is stable today doesn’t mean it may not have problems in the future.

Technology can help and it would be, and must be, part of the solution. We have seen irrigation efficiency improvements helping with improving farming practices. Having desalination plants, recycling and reuse would also help. Pumps, transfers and dams can help.

Now every one of these comes with trade-offs and some unintended consequences. If you improve irrigation efficiency and you have no plan to take the water back, then what we have seen is that improved irrigating efficiency results in increased water consumption because the farmers are not stupid to give water back to you unless you have a plan. They will expand their irrigated area or go for a thirstier crop which could lead to loss of groundwater recharge.

Building reservoirs has its trade offs as well. Building desalination plants produces brine which could impact the marine ecosystems. We should not over rely on technologies.

The systems that have been successful have combined technological solutions with institutional reforms. A good example is Israel. A lot of countries are inspired by Israel’s infrastructure and engineering of desalination, reuse, recycling and so on.

These matter but what is more fundamental is the decoupling of the economy from water. You understand that water is your deficiency but after making some mistakes you learn that you want to have a resilient economy and protect national security.

You have to make sure that a future drought would not cause a national security threat for you, meaning that your food production would not be impacted and there would not be major unemployment. That means that you have to diversify your economy and food imports and exports portfolio and also have some friends in the world. The service sector and industrial sector keeps your economy protected.

California also has a lot of infrastructure elements to its water security but also has a diversified economy not dependent on water. We saw in 2014 the big drought and the suffering was very visible in one of the strongest economic regions in the world. Farmers, cities, wetlands, aquifers got impacted but the economy of the state did not get impacted majorly. This was because the contribution of agriculture to the economy of the state is not huge. The reforms that have been implemented after droughts in California or in Australia are helpful to learn from.

What’s important is the economic capacity to handle a water crisis situation and this capacity cannot be created overnight. The countries in the Global South cannot become industrialised overnight and are able to diversify their economic portfolios. If nations take away water from farmers today it becomes a national security risk. If they delay this process and lose water physically they still face a similar situation.

The only way out is to enable them economically which some nations are doing better and better and some are not. 

AS: Can we learn from indigenous water management practices from around the world and the past?

KM: We can learn from indigenous water management practices but we should not have the delusion that a method that was functional 3000 years ago would work now directly. A good example is Persian Qanats which are underground water withdrawal and management systems from ancient Iran. They were very good and efficient yet Qanats cannot satisfy the demands of a country with 90 million people today.

Can we learn from them? Yes. Can we reintroduce them? Yes, but we have to supplement them with other methods. Indigenous knowledge becomes critical when we try to adopt some techniques from other places. The issue we have was that we copy systems from other places without thinking or understanding or adapting them to our context and that is why they fail.

In many of the places, farmers and communities were working together and there was social system of cooperation in place that was replaced by the introduction of technologies. Then farmers started competing with each other and we created the tragedy of the commons when for hundreds of years people have managed to survive there. 

AS: Amid accelerating global warming and heightened geopolitical tensions, how do you see the future pan out and what are some of the important points that we need to be careful about?

KM: Nature tells us that there will be variability in rainfall. There might be years that are wetter than before. The trend is telling us that we should be very concerned about the issues of insolvency and irreversibility of water systems. We should expect more tensions, more suffering and pressure on systems.

In what we have seen around the world, while automatically a water shortage does not translate into an uprising but we know that water is a pillar of national security, food security. We might see increased conflicts in transboundary systems and every level of water use between the stakeholders. At the same time, those who are in the intelligence and defence communities should be mindful of this and understand the value of greater investment in the water sector. It can support so many other objectives that nations have.

We are seeing the world being more fragmented and this could be an opportunity to get into a topic that is less dividing than other topics. We are hopeful about the upcoming UN water conferences in 2026 and 2028, end of the UN decade of water in 2028 and the fulfilment of SDG 6 (clean water and sanitation) and other SDGs in 2030. We hope that the scientific community, journalists and activists would help us develop narratives that are different from what is currently going on. We need stories that are more local and original and will get us to think out of the box.