Amid chronic groundwater depletion, water overallocation, land and soil degradation, deforestation, and pollution, all compounded by global heating, a UN report published last month argues that the familiar terms “water stressed” and “water crisis” fail to reflect today’s reality in many places.

We live in a post-crisis reality marked by irreversible losses of natural water capital and an inability to bounce back to historic baselines.

“This report tells an uncomfortable truth,” said lead author Kaveh Madani, Director of the UN University’s Institute for Water, Environment and Health, known as ‘The UN’s Think Tank on Water.’

“Many regions are living beyond their hydrological means, and many critical water systems are already bankrupt.”

Expressed in financial terms, the report stated that many societies have not only overspent their annual renewable water “income” from rivers, soils, and snowpack, but they have depleted long-term “savings” in aquifers, glaciers, wetlands, and other natural reservoirs.

This has resulted in a growing list of compacted aquifers, subsided land in deltas and coastal cities, vanished lakes and wetlands, and irreversibly lost biodiversity.

The UN report is based on a peer-reviewed paper in the Journal of Water Resources Management that formally defines water bankruptcy as:

1. persistent over-withdrawal from surface and groundwater relative to renewable inflows and safe levels of depletion; and
2. the resulting irreversible or prohibitively costly loss of water-related natural capital.

While not every basin and country is water-bankrupt, Madani highlighted, “enough critical systems around the world have crossed these thresholds. These systems are interconnected through trade, migration, climate feedbacks, and geopolitical dependencies, so the global risk landscape is now fundamentally altered.”

The current hotspots, according to the report, include the American Southwest and the Colorado River and its reservoirs, which have become symbols of over-promised water.

This situation is also prominent in the Middle East and North Africa region, where high water stress, climate vulnerability, low agricultural productivity, energy-intensive desalination, and sand and dust storms intersect with complex political economies.

Furthermore, in parts of South Asia, groundwater-dependent agriculture and urbanisation have produced chronic declines in water tables and local subsidence, the researchers said.

A world in the red

Drawing on global datasets and recent scientific evidence, the report presents the following stark statistical overview of trends, the overwhelming majority caused by humans:

• 50%: Large lakes worldwide that have lost water since the early 1990s (with 25% of humanity directly dependent on those lakes)
• 50% — Global domestic water now derived from groundwater
• 40%+ — Irrigation water drawn from aquifers being steadily drained
• 70% — Major aquifers showing long-term decline
• 410 million hectares — Area of natural wetlands – almost equal in size to the entire European Union – erased in the past five decades
• 30%+ — Global glacier mass lost in several locations since 1970, with entire low- and mid-latitude mountain ranges expected to lose functional glaciers altogether within decades
• Dozens — Major rivers that now fail to reach the sea for parts of the year
• 50+ years — How long many river basins and aquifers have been overdrawing their accounts
• 100 million hectares — Cropland damaged by salinization alone

The Human Consequences

• 75% — Humanity in countries classified as water-insecure or critically water-insecure
• 2 billion — People living on sinking ground.
• 25 cm — Annual drop being experienced by some cities
• 4 billion — People facing severe water scarcity at least one month every year
• 170 million hectares — Irrigated cropland under high or very high water stress – equivalent to the areas of France, Spain, Germany, and Italy combined
• US$5.1 trillion — Annual value of lost wetland ecosystem services
• 3 billion — People living in areas where total water storage is declining or unstable, with 50%+ of global food produced in those same stressed regions.
• 1.8 billion — People living under drought conditions in 2022–2023
• US$307 billion — Current annual global cost of drought
• 2.2 billion — People who lack safely managed drinking water, while 3.5 billion lack safely managed sanitation

To put it simply, according to Madani, “Millions of farmers are trying to grow more food from shrinking, polluted, or disappearing water sources. Without rapid transitions toward water-smart agriculture, water bankruptcy will spread rapidly.”

The report also underlines that water bankruptcy is not merely a hydrological problem, but a justice issue with deep social and political implications requiring attention at the highest levels of government and multilateral cooperation.

The burdens fall disproportionately on smallholder farmers, Indigenous Peoples, low-income urban residents, women and youth, while the benefits of overuse often accrue to more powerful actors.

Accordingly, another report, which was also published last month by the UN Environment Programme (UNEP), titled The State of Finance for Nature 2026, states that for every US$1 the world invests in protecting nature, it spends US$30 on destroying it.

This stark imbalance is the central finding of this report, which calls for a major shift in global financing of Nature-based Solutions (NbS) and phasing out harmful investments to deliver high returns, reduce risk exposure, and enhance resilience.

Looking at the current obsession with AI data centres, the UK government highlighted in its 2025 report, published by its Digital Sustainability Alliance (GDSA), that every interaction with AI systems requires water to keep the technology running.

For example, OpenAI’s GPT-3 used 700,000 litres of water during its ‘pre-training’ phase.

The GDSA report also highlighted that AI is predicted to lead to an increase in global water usage from 1.1bn to 6.6bn cubic metres by 2027. This is equivalent to more than half of the UK’s total water usage.   

The scale of AI’s water consumption 

Every interaction with AI systems requires water to keep the technology running. GPT-3, the large language model (LLM) which was developed and then simplified to create ChatGPT three years ago, used 700,000 litres of water during it’s ‘pre-training’ phase  

The Government Digital Sustainability Alliance’s (GDSA) report highlights that AI is predicted to lead to an increase in global water usage from 1.1bn to 6.6bn cubic metres by 2027. This is equivalent to more than half of the UK’s total water usage.

The Water Bankruptcy Challenge

As highlighted by the GDSA report, water covers 71% of Earth’s surface, but only 0.5% is available freshwater. As water demand increases, water scarcity and water stress are becoming an increasing challenge.

The World Economic Forum 2025 Report on Global Risks identified ‘adverse impacts of AI technologies’ and ‘Biodiversity loss and ecosystem collapse’ as significant risks in the next 10 years.

Hence, many experts and environmental campaigners highlighted that the water demand of AI technologies is likely to threaten global and national water security, especially in areas of existing water stress, which can in turn threaten the biodiversity of local areas and the needs of human populations.

According to the UK Government, demand for fresh water is expected to exceed supply by 40% by the end of the decade and 55% of global data centres are in river basins with high risk of water pollution, meaning much of the local water may be unsafe for use, increasing the pressure on clean water supplies and worsening the overall water scarcity in the regions.

Furthermore, nearly 68% of data centres are near protected areas or Key Biodiversity Areas, which rely on clean water supplies for the health of the ecosystems and communities that depend on them. Without it, these areas face greater risks of habitat loss, species decline, and reduced capacity to support both nature and people.

The BBC reported an example of this situation last summer, titled ‘I can’t drink the water’ – life next to a US data centre, where a retired lady believes the construction of a data centre, which is owned by Meta (the parent company of Facebook), disrupted her private well, causing an excessive build-up of sediment and resorted to hauling water in buckets to flush her toilet.

This story is a common occurrence in many small towns and rural areas throughout America, and around the globe, with rising pushbacks and legal actions from local communities.

The UN researchers last month called for a new global fresh water agenda to be developed that takes Global Water Bankruptcy as a starting point and uses the 2026 and 2028 UN Water Conferences, the conclusion of the Water Action Decade in 2028, and the 2030 SDG 6 timeline as milestones for resetting how the world understands and governs water.