What does it mean for a water system to go bankrupt?
In January 2026, two publications introduced a new concept into the global water discourse: water bankruptcy. A paper in Water Resources Management formally defined the concept, followed by the Global Water Bankruptcy report of the United Nations University Institute for Water, Environment and Health. The report argued that more water systems are losing their ability to return to their historical normal and that the language of temporary “water crises” is no longer adequate in many places.
Think of a water system like a bank account. Rain, snowmelt and other renewable flows are our water income, replenishing checking accounts such as rivers, lakes and reservoirs. Groundwater acts more like a savings account.
Using savings during difficult periods is normal. Trouble begins when we consistently spend more than we earn, increasingly rely on savings to cover the deficit, start drawing down the principal, and borrow more from nature by degrading the systems that produce, store and regulate water. Eventually, returning to the previous balance may no longer be realistic.
Suggested citation: Kaveh Madani. “Water Bankruptcy Is More Than You Think—13 Misconceptions To Avoid.” Forbes, 5 October 2026.
