Efforts to extend the Kyoto climate pact framework risk collapse in a setback to years of diplomatic bargains, as chances fade that the United States will join other rich nations in capping emissions.

December's U.N. climate conference in Denmark failed to cite the U.N.-brokered Kyoto pact as a touchstone -- sapping hopes for a global carbon price to guide billions of dollars in investments from nuclear plants to solar panels.

We are probably seeing the beginning of the end for the Kyoto Protocol in its current form, said Johan Rockstrom, head of the Stockholm Resilience Center at Stockholm University.

But it's also very clear that we are still in a situation where there is no alternative. So we are in a fix.

Plans to extend the Kyoto Protocol, the world's main pact for fighting climate change, beyond 2012 hinge on bridging a divide between rich and poor countries over the cost of switching from carbon-intensive technologies.


The Denmark summit came up with a Copenhagen Accord aimed at limiting global warming to below 2 degrees Celsius (3.6 F) above pre-industrial times, and also pledged $100 billion a year from rich nations in climate aid for the poor from 2020.

But the accord barely mentions Kyoto, which binds 37 rich nations excluding the largest emitter, the United States, to cut greenhouse gas emissions by an average of 5 percent below 1990 levels between 2008-12.

Developing nations led by China and India insist the rich must extend the Kyoto Protocol to 2020 before they take on commitments to slow rising emissions in a new treaty also with 2020 targets for all nations.

President Barack Obama has tried to commit mandated cuts in U.S. emissions in the range of 17 percent below 2005 levels by 2020, a cut of 4 percent below 1990 levels. But the U.S. Senate has stalled legislation in that direction.

Obama announced this week $8.3 billion in loan guarantees to build the first U.S. nuclear power plant in the U.S. in nearly three decades to help break the legislative logjam by cajoling conservatives to support a climate bill, though analysts say it's unlikely to work.

It's not just the Protocol that looks in danger, the whole legal architecture for post-2012 looks in danger, said Stephen Howes, a director at the Crawford School of Economics and Government at the Australian National University in Canberra.

Whether we'll have a legal architecture in place by 2012 looks very questionable.


With no legal certainty, Kyoto could split into a patchwork of unilateral promises to fight climate change, such as the European Union's plan to cut emissions by 20 percent from 1990 levels by 2020.

There is a risk of Kyoto dissolving, said Jennifer Morgan, climate and energy program director of the World Resources Institute in Washington.

You do need either a Kyoto-type framework or a clearer commitment to markets -- such as in the United States and Australia. You need clear signals going forward about the price of carbon, she said.

Some in the carbon credit trading market however expect the Kyoto carbon-offset framework to survive regardless of whether there is an extension because it underpins demand for cap and trade policies by the European Union and other local programs.

I don't think Kyoto is dead, said Robert Stavins, director of the Harvard Environmental Economics Program, who said U.S. carbon caps were still possible in 2010.

He pointed to the $6.5 billion Clean Development Mechanism under Kyoto that promotes low-carbon investments in developing nations, and which is widely supported by them.

Trading of the offsets by investors such as banks as well as brokers has also created big profits. Europe is a major buyer of the offsets, which can be used in the EU emissions trading scheme.

Still, regional or local efforts are seen as too limited to make a dent in global emissions that a global pact could provide and see the extension as a litmus test for the world.

At the end of the day you only have the European Union left as the main cheerleader for Kyoto, said Alden Meyer, of the Union of Concerned Scientists.

(Additional reporting by Gerard Wynn in London and Jeff Mason in Washington; Editing by Ed Lane)