* Governments face 'end or extend' Kyoto Protocol dilemma
* First period runs to end-2012: fate unclear
* Nations split on future of climate pact
* U.N. sees "intermediate solution" beyond 2012
By Alister Doyle, Environment Correspondent
OSLO, Feb 17 Governments are looking at ways to keep the U.N.'s Kyoto Protocol going beyond 2012 in some form to defuse a standoff between rich and poor nations that threatens efforts to tackle global warming.
Negotiators from almost 200 nations will meet in Bangkok from March 3-8, after side-stepping the Kyoto issue at their last meeting in Mexico in December.
"There is some creative thinking going on" about Kyoto's future, said Jennifer Morgan, director of the climate and energy programme of the Washington-based World Resources Institute.
The Kyoto Protocol obliges almost 40 industrialised nations to cut greenhouse gas emissions and is meant to underpin carbon trading, but existing curbs expire on Dec. 31, 2012 and developed and developing nations are at odds over its future.
The U.N.'s climate chief, Christiana Figueres, said early this month the world needed an "intermediate solution" for Kyoto -- whose text says it will be extended beyond 2012 -- since demands by rich and poor nations are diametrically opposed.
Japan, Russia and Canada insist they will not extend cuts in greenhouse gases under Kyoto and want all top emitters, led by China and the United States, to agree a new treaty beyond 2012.
Emerging nations, led by China and India, say rich nations must extend Kyoto to show leadership in combating climate change and averting what the U.N. panel of climate scientists says will be more floods, heatwaves, droughts and rising sea levels.
Kyoto obliges cuts in greenhouse gas emissions averaging at least 5.2 percent below 1990 levels during the period 2008-12. The United States is the only rich nation outside Kyoto and emerging nations have no binding goals.
Experts say all intermediate solutions have drawbacks.
One option is to preserve elements of Kyoto, such as a mechanism that promotes carbon-cutting investments in developing nations, while allowing each rich nation to set its own cuts in greenhouse gas emissions beyond 2012.
Another is to extend existing emissions cuts under Kyoto, perhaps until 2015, by when it may be clearer if a legally binding treaty is possible. But prospects for a binding deal have faded since a U.N. summit in 2009 fell short.
A radical idea is to revive an "Article 10", rejected by developing nations in 1997 when Kyoto was agreed, that would let developing nations list "voluntary commitments" to curb their rising greenhouse gas emissions as part of the text.
Or the European Union and other backers of Kyoto might push ahead and persuade Japan and others to commit to new, tougher emissions goals under an extended protocol. A continued small Kyoto group is likely to face calls to impose trade barriers on cheaper energy-intensive imports.
Or Kyoto might be abandoned and replaced by a new deal, as urged by Japan and others. That looks an unlikely outcome.
For 2011, governments want to focus on details of a deal to set up a Green Climate Fund, measures to combat deforestation and ways to adapt to climate change, as agreed in Cancun, Mexico in December.
They also agreed to a goal of limiting the rise in global temperature to below 2 degrees Celsius (3.6 F) above pre-industrial times. The United Nations says pledges so far for cuts in greenhouse gas emissions are inadequate to reach that goal.
"In Cancun, the U.N. negotiations took their hand off the self-destruct button. That button is Kyoto and legally binding emissions targets," said Jonathan Grant, director of carbon markets and climate policy at PricewaterhouseCoopers [PWC.UL].
"The problem is that some developing countries are insistent on legally binding targets," he said. "The uncertainty from the United Nations talks filters to uncertainty at the EU level. Combined with fraud in the market, it's knocking the confidence in new investment."
In a cyber attack on some European Union carbon registries last month, carbon permits worth about 50 million euros ($67.66 million) were stolen.
A big problem with designing Kyoto is that major emitter the United States is not a participant. Former President George W. Bush said Kyoto wrongly omitted curbs on greenhouse gas emissions for developing nations and would cost U.S. jobs.
Hermann Ott, a member of the German Bundestag for the Green Party and author of a book about Kyoto, said one option was to let countries work at different speeds. "The United States won't be part of a treaty for 10 or 15 years," he said.
President Barack Obama failed last year to get the U.S. Senate to agree to cuts in emissions. (Additional reporting by Krittivas Mukherjee in New Delhi; Editing by Janet Lawrence) (For Reuters latest environment blogs, click on: blogs.reuters.com/environment/)
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