Nepal has activated emergency procedures under the Fund for Responding to Loss and Damage (FRLD), a United Nations initiative created to assist countries affected by climate-related disasters. This follows catastrophic flash floods in late August, which were caused by the sudden collapse of a glacial lake. The floods have killed more than 1,300 people and left thousands missing. Nepal’s finance minister, Swarnim Wagle, has estimated the cost of rebuilding at $4–5 billion, far exceeding the FRLD’s maximum single-disaster funding limit of $20 million. The FRLD, established in 2023, has received $822 million in total pledges, with around $350 million currently available for use. However, developing nations have submitted 180 applications totaling $2.8 billion, far exceeding the fund’s capacity. In response to Nepal’s formal request, an emergency meeting of the FRLD board is being considered. Richard Sherman, a South African climate negotiator and board member, said the board is aiming to provisionally allocate funds to Nepal, potentially within a month or two. Nepal’s case is a pivotal test for the FRLD, as it is the first time a country has invoked its emergency procedures. The normal process for the fund can take six to eight months, but emergency cases are meant to be resolved more quickly, within six to eight weeks. Andreas Sieber of the campaign group 350.org noted that the situation underscores the fund’s lack of resources, as developing countries struggle with the increasing impacts of climate change. A 2024 study in the journal Nature estimated that developing nations would need $395 billion annually by 2025 to address climate-related damage, a figure in line with those from the Intergovernmental Panel on Climate Change. Despite the funding gap, the FRLD board is beginning a pilot phase using available resources to test its systems. However, the shortfall is not unique to the FRLD—other climate finance mechanisms have also faced challenges. For example, the Green Climate Fund lost $3 billion in pledged money after the U.S. withdrew its support, and the UK has reduced its climate finance contributions by about half. Harjeet Singh, who has worked on the FRLD’s design for nearly two decades, argued that the global economy has the resources needed for climate support, pointing to funding for wars, pandemics, and fossil fuel subsidies. He criticized the way money is currently distributed, with wealth concentrated among the rich rather than being used to address climate needs. Nepal’s foreign minister, Shisir Khanal, emphasized that the country is “paying the ultimate price for a global crisis we did not create,” highlighting the disparity between its minimal contribution to global warming and its vulnerability to climate impacts. President Ramchandra Paudel has made a formal international appeal for climate justice, and Prime Minister Balendra Shah plans to raise the issue at the UN General Assembly. Experts warn that the gap between Nepal’s needs and what it can receive from the FRLD may force the country into debt, with the World Bank likely to offer loans instead of grants. This pattern is similar to Pakistan’s experience after 2022 floods, where the country took on significant debt to rebuild. Scientists agree that rising temperatures have destabilized glaciers in the Himalayan region, though the exact cause of the August collapse is still under investigation.