Sala Khan Khel, 40 miles outside Kabul, looks like a rural paradise at harvest time. Women and children play behind the high mud walls of the old houses, the men thresh the wheat, teenagers pick walnuts and the water coming straight off the snowy mountains high above the village gurgles through the irrigation canals.

But the rural idyll hides conflict, deep poverty and growing environmental degradation. Most families here say they have been uprooted by war in the last 20 years, and that climate change means the seasons have become shorter. Also, the population has grown so much there's not enough land to grow food for everyone. On top of that, they say, the water is polluted and is now a source of conflict.

"We can't earn nearly enough. Compared to 20 years ago we are now much poorer. We have new crop diseases we cannot treat, there's conflict between the herders and the settled farmers, and people are cutting down the forests for fuel," says Mahmoud Saikal, a village elder.

Sala Khan Khel's problems mirror those seen all over Afghanistan and the prospects of this war-torn, hungry country getting anywhere near meeting millennium development goal 7 – which covers water, sanitation and the environment – is zero in the next decade and probably for far longer.

Afghanistan is not just one of the poorest countries in the world, it has some of the very worst human development indicators, comparable to Sierra Leone and Angola. Its development has been tied closely to conflict for decades and it only signed the Millennium Declaration in 2004.

Since then, its situation has worsened. Millions of people have flooded into the capital Kabul, either to escape conflict or increasingly to find work or food. The city, with an estimated five million people, is believed to be the fastest-growing capital in the world and new, illegal shanty towns creep up and over the hillsides every year. More than 75% of the whole of the urban Afghan population live without water, electricity or secure ownership. In Kabul, the figure is almost certainly higher.

Government statistics, which are sparse and unreliable, are shocking: in rural areas, it is estimated that 80% of all Afghans are drinking contaminated water. A similar proportion of hospital patients in Kabul suffer from diseases caused by polluted air or water. The burgeoning city generates nearly 2,000 tonnes of solid waste a day but only has the capacity to handle 400 tonnes.

It is one of the only capital cities in the world without a sewage system and last year a survey found that it had only 35 public toilets. The authorities say only one in 10 or 20 households have access to clean water via the city water system, with everyone else sharing communal water pumps.

In rural areas, where people rely on timber for fuel, the forests are disappearing. This, says a spokesman for the environmental protection agency, "is an ecological disaster. With the loss of forests and vegetation, and excessive grazing, soils are being exposed to serious erosion from wind and rain. Land productivity is declining, driving people from rural to urban areas in search of food and employment."

Like many other developing countries, Afghanistan has strong environmental laws but no money to implement them. An EU review of MDG 7 statements from more than 60 countries earlier this year shows that monitoring and reporting, for the most part, have not been undertaken systematically.

The result is that the cycle of poverty, ill health and environmental destruction continues worldwide, say observers.

Although the world is ahead of schedule in meeting the MDG 2015 target on drinking water, in 2008 some 13% of the world's population, or 884m people, still depended on unimproved water, sharing it with animals from lakes, rivers and dams.

On sanitation the situation is desperate. "If current rates of progress go on, MDG 7 target will take more than 200 years to be achieved in sub-Saharan Africa and countries like Afghanistan. Globally, 4,000 children die from diarrhoea a day and in Africa it is now the biggest killer of children under five. Even if the MDG 7 sanitation target were achieved, more than 1.7 billion people would still be without sanitation," says a spokesman from campaign group WaterAid.

Progress on the environmental targets has been the slowest of all MDGs. Worldwide, forest deforestation and fish-stock depletion rates are higher now than they were in 2000. The target to reduce the rate of biodiversity loss has been missed by all 192 countries who have signed up. Climate change emissions in developing countries are soaring and rose overall nearly 30% between 1990 and 2005.

Bright spots include slums. In 1990, UN Habitat could report that 46% of urban populations in developing countries lived in slums, a fall of more than 10% thanks to rapid industrial growth in China and India. Equally, while millions of acres of forest continued to be lost in Latin America and south -east Asia, the rate of replanting worldwide increased dramatically in the last decade.

Worryingly, the pressure on biodiversity – the wealth of nature that is the base of all economies – is increasing. No country has reported progress since 1990, and the need to produce more food and materials for a rapidly increasing global population is threatening most developing countries' habitats.

Most indicators are negative. No government claims success. Some 17,000 plant and animal species are threatened now with extinction. The world's fisheries are not satisfactory – more than half are fully exploited and 28% are overexploited, says a UN report.