Australia on Tuesday shelved plans for a carbon trading scheme to cut greenhouse gas emissions until at least 2013, blaming the slow pace of global action and an obstructive opposition.
Prime Minister Kevin Rudd, who has described climate change as "the great moral challenge of our generation", said plans for a Carbon Pollution Reduction Scheme (CPRS) were on hold after they failed to pass through parliament.
"The opposition decided to backflip on its historical commitment to bring in a CPRS and there has been slow progress in the realisation of global action on climate change," Rudd said.
"These two factors together inevitably mean that the implementation of a Carbon Pollution Reduction Scheme in Australia will be delayed."
The carbon trading legislation was rejected for the second time in December when it failed to pass through the Senate, the upper house of Australia's parliament, where several independent members hold the balance of power.
Rudd, who is expected to call an election this year, said Australia will still meet its commitments to reduce greenhouse gas emissions, which are blamed for global warming, by at least five per cent of 2000 levels by 2020.
"Climate change remains a fundamental economic and environmental and moral challenge for all Australians, and for all peoples of the world. That just doesn't go away," he said.
But the government's plans to introduce an emissions trading scheme, which would have been phased in from July 2011, were thwarted when the conservative opposition reneged on its agreement to back the deal, he said.
Rudd said he still believed an emissions trading scheme was the most effective and least expensive way of acting on climate change, but he will wait until the end of the Kyoto Protocol commitment period in late 2012.
The Greens slammed the delay, saying the government lacked political will. "Climate change is real. It is stalking Australia. It is threatening the Great Barrier Reef," Greens Senator Bob Brown said.
The conservative opposition, which has described the carbon trading scheme as "a great big new tax on everything", said it was sceptical of the government's new position.
"It is a pea and thimble game because what is absolutely clear is that last year's greatest moral challenge has become this year's inconvenience," climate action spokesman Greg Hunt said.
Rudd, a pro-green Prime Minister who played a prominent role at the Copenhagen UN summit on climate change last year, presides over a country which remains the world's worst per capita polluter.