* Compromise would avoid rising costs, escalating damage
* Talks seeking deal on package, short of treaty
By Alister Doyle and Gerard Wynn
CANCUN, Mexico, Nov 29 (Reuters) - Almost 200 nations at U.N. climate talks in Mexico must compromise on a modest package of measures or face escalating damage from floods, droughts and rising seas, scientists and politicians said on Monday.
"Our relation with nature is reaching a critical point," Mexican President Felipe Calderon told the opening of the two-week talks in a tightly guarded hotel by the Caribbean.
"We either must change our way of life to stop climate change or climate change will permanently alter the way of life of our civilization, and it will not be for the better," he said.
Representatives from nearly 200 nations will seek to break a deadlock between rich and poor -- especially the United States and China -- on ways to slow climate change since the U.N.'s climate summit in Copenhagen last year failed to agree to a binding treaty.
The United Nations wants agreement on a new "green fund" to help developing nations and ways to preserve rainforests and help the poor adapt to a hotter world. It will also seek to formalize existing targets to curb greenhouse gas emissions.
Calderon said extreme weather, including storms in Mexico, floods in Pakistan and a heatwave in Russia in 2010, showed a need for compromise.
"Delays in action would only lead to impacts which would be much larger and in all likelihood more severe than we have had so far," said Rajendra Pachauri, head of the U.N. panel of climate scientists.
He said costs of containing global warming would rise the longer the world waited.
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The talks are seeking to find a successor to the U.N.'s existing Kyoto Protocol, which obliges all rich nations except the United States to cut greenhouse gas emissions by an average of 5.2 percent below 1990 levels by 2008-2012.
Kyoto backers say they will only deepen their cuts, shifting from fossil fuels to clean energies like wind or solar power, until 2020 if the United States and big emerging economies led by China and India take on binding curbs.
Developing nations say they need to burn more energy, increasing greenhouse gas emissions, to fight poverty. U.S. President Barack Obama's hopes of legislating greenhouse gas cuts vanished after Republican gains in mid-term elections.
At the opening ceremony, Christiana Figueres, head of the U.N. Climate Change Secretariat, mentioned the word "compromise" four times in a short speech urging a "balanced outcome."
"A tapestry full of holes will not work and the holes can only be filled in through compromise," she said, adding she was convinced a deal was possible.
Success would help get the talks back on track after the acrimonious Copenhagen summit agreed to a non-binding deal to limit a rise in world temperatures to 2 degrees Celsius (3.6 F) above pre-industrial times.
Failure would raise questions about the future of Kyoto, which underpins prices in carbon markets. Unless a new round is negotiated, Kyoto will end in 2012, leaving a patchwork of national measures to combat climate change.
In Brussels, U.N. climate commissioner Connie Hedegaard said that the talks risked "losing momentum and relevance" if they failed to reach a deal.
She said that it was regrettable that some countries seemed unable to move forwards -- noting that the United States had failed to legislate cuts.
Jonathan Pershing, head of the U.S. delegation at the Cancun talks, told Reuters that Washington was willing to "move forward" on all issues like finance or forestry protection "in the context of a package."
Separately, a report by Oxfam said that more than 21,000 lives have been lost to climate related disasters in the past year alone.
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