“We need to decouple economies from water,” says water-bankruptcy expert Professor Kaveh Madani

Professor Kaveh Madani, the director of the UN University Institute for Water, Environment and Health and 2026 Stockholm Water Prize laureate coined the term “water bankruptcy” to describe the water depletion he sees happening in every part of the world—regardless of economy, development status or political will.

His landmark report on what this means for the future of human water systems came in January, calling for a transition from crisis response to bankruptcy management—a move he says can only happen in an environment of political honesty.

How would you sum up the term water bankruptcy—and why is that term fitting for what you are describing?

Water bankruptcy is where the continuous depletion and degradation of water resources permanently outpaces nature’s ability to replenish them. The result is both an issue of “insolvency” and an “irreversibility” of the resulting ecological damage.

We put surface water into the “checking account”, but if you want to break it down, it also includes rivers, lakes, wetlands and reservoirs, as well as soil. Then there is the “savings account” side of our water economy, which includes groundwater and glaciers that are now melting.

The result of this bankruptcy is the drying of lakes and rivers, shrinking wetlands, declining aquifer water levels, subsiding land, sinkholes, increased soil salinity, desertification, sand and dust storms, more wildfires, biological-diversity reduction or the extinction of different species.

We believe that water bankruptcy is a post-crisis state of failure—it's beyond the water-crisis state.

What are the characteristics that mark water depletion out as bankruptcy and how different can this look from one region to the next?

Water bankruptcy is not only about quantity, but also about quality. In many parts of the world, we have water available on paper but it’s so toxic that it cannot be used.

In the past, when you spoke about water bankruptcy, people would think of the Middle East, of the dry areas of the world. But if you look at Europe, where there is typically a lot of water, we are seeing major rivers like the Danube facing challenges. In the United States, Lakes Mead and Lake Powell, the country’s two biggest reservoirs, are at their lowest levels historically.

You might have rivers that are highly polluted; elsewhere it is lakes that are dying. In some places increased soil salinisation has made agriculture impossible, or land is sinking. The symptoms and the impact of water bankruptcy can be very different from one location to another, which matters because it means we have to understand every system locally.

What were some of the big surprises from your research?

The biggest surprise was the similarity between these problems around the world. If you look at the Aral Sea during the former Soviet Union for example, that has the same story as the Great Salt Lakes in Utah in the United States, as the Dead Sea in the Middle East, Lake Urmia in Iran or Lake Chad in Africa. The stories are very similar, even though the economic, political and development conditions are so different.

That is quite striking: we have made similar mistakes around the world and have not learned from each other. And we continue to make those mistakes.

The other thing that was surprising after publication is that some researchers in more privileged countries were in denial, thinking that these are problems of the global south. But then summer came and parts of the world that last year were in a very bad condition—my home country of Iran for example—are now doing better. In other parts of the world where people were in denial—in Europe for example—major water problems have emerged.

Your report talks of a need for honesty moving forward: what would you like to see from politics?

Leaders must recognise the importance of water as a strategic asset and understand what role it plays in the economy and in national security.

Governments must admit that water is limited and that some of the damage is not reversible. And they must do it now, communicating that demand management and consumption reduction must be part of the solution. At some point you have to make tough decisions: there’s no problem with data centres for example, but you have to weigh that up against agriculture. Maybe you cut water on alfalfa and cucumber and get the data centres, if that makes sense for the local community.

What you can’t do is expand in every direction forever.

What is the economic and developmental impact of water bankruptcy?

Most people—and most governments—do not understand the role of water in the stability of the national or global economic system.

Agriculture is one side of that story. The other important side, which is often ignored, is that water creates employment opportunities for the poor of the world. In those cases, water bankruptcy means hunger, unemployment, forced migration, tension, even wars, within societies. Water bankruptcy can destabilise nations, and if that role is not understood well, solutions will be neither practical nor meaningful. We need to decouple economies from water to make them less vulnerable.

Water bankruptcy affects us all. We are interconnected through trade, politics, climate, migration, and so on. So, if the global landscape changes, we are all affected—as we saw with the closure of the Strait of Hormuz. That showed just why we cannot take things for granted.

What can you tell us about the data side of water bankruptcy?

The first step when it comes to addressing water bankruptcy is to do proper water accounting. For that, you need proper data. What we often see in societies or communities that are in conflict is that they don’t know what the status of the system is.

There are still a lot of unknowns, especially when it comes to reversibility: it's very hard to determine the exact tipping-points of particular locations.

Technology is playing a big role in data gathering and analysis but, as always, technology in itself is not going to solve the problem. Any solution needs to come with brave decisions about the diversification of the economy and decoupling it from water to the extent possible. At the micro scale, you need increased productivity and more efficient water systems: that’s where technology can help.

Finally, many people struggle with so-called “climate dread”. What message do you want to send from your report—and what should people take from the idea of water bankruptcy?

Bankruptcy might sound like an admission of failure and a recognition that the good old days are gone, but it is not the end of the world.

We don't want to kill hope. We want to be realistic about the future and what has happened. That is as important here as it is in financial bankruptcy. Delay makes the situation more difficult. The delay, I would say, is the failure.

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