What happens when water scarcity is no longer temporary?

The concept of “water bankruptcy,” developed by 2026 Stockholm Water Prize laureate Professor Kaveh Madani, describes a chronic condition in which water systems can no longer return to their historical balance under prevailing climatic, ecological and institutional conditions. 

This distinction matters. Water bankruptcy signals that the underlying conditions have changed. The challenge is to respond to immediate water shortages while adapting to a longer-term reality in which historical water conditions may no longer provide a realistic baseline for planning. For cities, this means planning for a changing water reality while preventing further degradation and building resilience across the wider water system.

This was the focus of a discussion at UNCCD COP17, where ICLEI and the Global Water Operators’ Partnerships Alliance convened the side event Preventing water bankruptcy: Cities, utilities and catchments on the frontline of drought resilience. Speakers explored the practical and political shifts needed to move from short-term crisis response toward long-term water resilience.

1. Water bankruptcy is a diagnosis, not a declaration of defeat

Recognizing water bankruptcy means acknowledging the scale and structural nature of the challenge. Rather than moving from one water emergency to the next, the concept can help create the political space for longer-term responses and new partnerships among cities, utilities, catchment managers, communities and national institutions.

São Paulo, Brazil, offered one example of this longer-term approach. José Renato Nalini, Executive Secretary for Climate Change at the São Paulo Municipal Government, highlighted the planting of half a million trees since 2021 as part of the city’s efforts to address land degradation and restore its aquifer reserves.

2. Urban water resilience starts beyond the city

Municipal governments, water and sanitation utilities, basin organizations and other catchment actors must work together to reduce water losses and over-abstraction, diversify and reuse water supplies, restore ecosystem function, strengthen drought preparedness and mobilize investment. André Viola, Member of the Aude Departmental Assembly (France), stressed how good water management is inseparable from good soil management. Healthy soils retain water, reduce runoff, support infiltration and protect landscapes from degradation. Making this connection operational requires political leadership, coordination and investment across sectors. 

ICLEI Water Systems Coordinator, Anton Earle, emphasized that too often we treat urban water insecurity as a pipe, pump or dam problem. This discussion made clear that it is also a land, soil and governance problem. The resilience of a city depends on what happens across the wider catchment — how rainfall is absorbed, how ecosystems are protected, how utilities are supported, and how institutions work together before crisis becomes collapse.

3. Water resilience means working with multiple sources and solutions

There is no single infrastructure solution to growing water stress. B. Purevdagva, Governor of the Capital City and Mayor of Ulaanbaatar, outlined a multiple-sources approach: Increasing storage infrastructure while also protecting rainfall infiltration, expanding water recycling and reuse, and reducing non-revenue water.

4. Small actions add up

Saldan Oduntuya, Member of Parliament and former Minister of Environment and Climate Change of Mongolia, highlighted the cumulative power of thousands of smaller interventions. Rooftop rainwater harvesting, local infiltration measures, reduced wastage and community stewardship may seem modest individually, but at scale they can strengthen the resilience of entire urban water systems.

5. Water resilience is a governance challenge

Cities cannot secure their water future alone. They need a meaningful role in catchment governance because urban resilience depends on upstream land, soil and ecosystem health.

That also means breaking down institutional silos. Water, land and climate action need to be planned, financed and implemented together, reducing fragmentation and the burden on local governments. The three Rio Conventions offer an opportunity to better align urban resilience, ecosystem restoration and climate adaptation around shared water outcomes. ICLEI will continue developing these themes throughout 2026, including at the Biodiversity and Climate COPs and the UN Water Conference.