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The Fund for Responding to Loss and Damage (FRLD) is set to assist governments grappling with the immediate impacts of extreme weather, particularly concerning the significant indirect economic losses experienced in Small Island Developing States (SIDS). Research from the Resilient and Sustainable Island Initiative (RESI) reveals that between 2000 and 2022, indirect economic loss and damage in SIDS may have reached an alarming $107 billion, with $39 billion, or 36%, attributed to climate change. When considering both direct and indirect impacts, the total could amount to approximately $141 billion, with 38% linked to climate change. Projections suggest that by 2050, cumulative attributable loss and damage in SIDS could reach $71.6 billion under a 1.5°C scenario and up to $75.2 billion under a 2°C scenario.   This ODI policy brief presents these initial calculations and recommends that the FRLD develop a budget support mechanism that can help governments of SIDS and other vulnerable countries address the extended impacts of extreme weather on their economies. An increase in concessional finance will also be needed to support rapid recovery in key sectors and avoid some of the indirect impacts on economic output.*