Using water more efficiently in everything from daily life to agriculture and industry would help curb climate change - a potential benefit not widely recognised.
In a report issued on World Water Day, UN agencies said global warming threatened the right to water and sanitation for "potentially billions of people".
Policymakers and businesses should seek to manage water resources better, to economise on the electricity and fuel needed to pump, clean and deliver water, the report said.
"If you save water, you're saving energy and reducing the greenhouse gases to produce that energy to bring the water," said Richard Connor, the report's editor.
Using less energy cuts down further on the water needed to produce electricity, creating a virtuous circle, he said.
Even more water can be saved by switching to less-thirsty power sources like wind instead of fossil fuels, he added.
Water use has increased six-fold over the past century and is rising by about 1 percent a year, said the United Nations World Water Development Report 2020.
It outlined ways water could be used and recycled more effectively to limit emissions, alongside looking after nature.
Restoring and protecting wetlands, for example, is of "critical importance" because they store twice as much carbon as forests, while also preventing floods, purifying water and providing a habitat for animals and birds, the report said.
Conservation agriculture - a green farming approach that causes minimal disturbance to the soil - helps reduce carbon emissions and the huge amounts of water needed for crop irrigation in intensive farming systems.
Treating more wastewater would also make a big difference, said the report, noting 80 to 90 pe cent of wastewater is discharged to the environment without any form of treatment.
Untreated wastewater is a major source of methane, a powerful greenhouse gas.
The best solution, the report said, is to invest in modern techniques that extract methane from organic matter in wastewater and use this biogas to generate the energy needed to treat the water - a method already used in some water-scarce countries like Jordan, Mexico, Peru and Thailand.
One of the main barriers to these types of approaches is a lack of cooperation between government officials working on climate change and those tasked with managing water.
"When it comes time to move from talk to action - be it finance or otherwise - the talk falls on deaf ears and water gets put aside and ... left behind," said Connor.
More concrete efforts to adapt to rising water stress and cut emissions from water use will require joint planning between climate change and water specialists, as well as greater investment to put them into practice, the report said.