Nepal has asked the world for help, and there is a system meant for this kind of request. After a glacier collapsed above the NepalChina border on August 26, causing a dam-break flood that killed more than 1,250 people along the Bhote Koshi and Trishuli rivers, Kathmandu turned to the Fund for Responding to Loss and Damage. Right now, the fund can give up to twenty million dollars to any single project. Nepal’s finance minister says rebuilding will cost four to five billion. This gap is not a mistake; it is how the system was set up. The fund, created at COP27 and put into action at COP28, is meant to help poorer countries deal with climate damage they cannot prevent or adapt to. Nepal is the first real test for this fund, and its negotiators have asked the board to meet urgently instead of waiting until December. The fund’s resources are limited: about 822 million dollars have been promised, but only about half has actually been delivered. There are 180 first-round requests asking for a total of 2.8 billion dollars.
Without more money, the fund could run out within a year. The system is voluntary by design. Developed countries, led by the United States, made sure that paragraph 51 of the agreement says the fund does not create any legal responsibility for compensation. When Kathmandu talks about ‘moral liability,’ it is accurate. The legal responsibility was removed in 2015. In July 2025 the International Court of Justice held that states carry binding obligations to protect the climate system, and owe full reparation where a sufficiently direct and certain causal link can be shown. The opinion is advisory, and that last condition is where a claim about one glacier will be argued for a decade. Nepal will not be paid out of it. The country after Nepal might. So, who pays? Take India, since Nepal has named it. India is the third-largest emitter today, at seven to eight per cent of global greenhouse gases, but on the ledger that governs warming, everything released since industrialisation, it accounts for about three per cent. The United States sits at a fifth to a quarter of that historical total. India’s reply to Kathmandu, that developed countries should take the lead, is correct, and beside the point for what happens next in the Gandak. India’s risk from this kind of disaster is not about legal responsibility. It is about real physical and financial danger.
The same floodwaters put six districts in Bihar on alert within days. This disaster was not completely unexpected. Scientists advising Kathmandu saw satellite images days earlier that showed changes on the glacier’s surface and a crack forming in the rock above. There was no warning system in place, and little was done after a similar avalanche in 2024. Researchers will not blame this single collapse directly on climate change, even though the Himalayas are warming twice as fast as the global average. The mountain gave a warning, but no one was watching in time to move the village. India has seen this kind of disaster before. On October 4, 2023, South Lhonak lake in Sikkim burst and sent water into the Teesta River, destroying the 1,200 MW Teesta III dam at Chungthang in just minutes. This dam was worth fourteen thousand crore rupees, and about a hundred people were killed or went missing. Risks from melting glaciers are never included in the cost of these projects, because there is no record of such events and no insurance company will cover them. As a result, the costs fall on state budgets and the people living downstream. India has 189 glacial lakes considered high-risk, with forty in Sikkim alone.
The fund meant to address these disasters has less than half a billion dollars and can only be used once. So, the real answer to who pays is split between two groups. Countries whose carbon emissions are already in the atmosphere owe for reconstruction. By that standard, India owes little, while Europe and the United States owe much more. Prevention is a different matter, and it is the bill India should want to pay. Setting up a monitoring and early-warning system across the Koshi, Gandaki, and Karnali basins would cost less than losing one major power plant, and it would protect both Indian dams and districts as well as Nepali villages. Nepal is not seeking charity and will not receive compensation—not from a system which is designed to avoid using that term. So long as the contributions are voluntary, each disaster will come to an end in the same way: with an emergency appeal, a small grant, and the poor country then having to borrow the remainder. Yet money cannot detect a glacier breaking up or help a family to escape in time. The mountains will fail once more, and soon. The real decision to be made is whether or not the area puts money into preventing disasters or continues to count the dead and pass on the bill. Ankit Mishra is an ICSSR Fellow at Govind Ballabh Pant Social Science Institute, India. And Deepa Batra is a PhD Scholar at National Institute of Technology, Jaipur, India.