It was once a centrepiece of the Federal Government's election strategy, but now the emissions trading scheme (ETS) has been relegated to the shelf until at least 2013.

Delaying the scheme means the Government could save $2.5 billion from its budget over the next three years, because it would not be paying compensation to households and industries.

Prime Minister Kevin Rudd recently said climate change remained a fundamental economic, environmental and moral challenge, whether it was popular or not.

But Government sources say it was decided last week to remove the scheme from next month's budget, bowing to the political reality that the Senate is unlikely to pass the ETS any time soon.

The Upper House has already blocked the ETS legislation twice.

The bills are before the Parliament again but the Senate has delayed the debate while it examines the deal that Mr Rudd struck with former Opposition leader Malcolm Turnbull.

The bottom line is that neither the Opposition, now led by Tony Abbott, nor the Greens like the amended legislation, so it remains in limbo.

Greens leader Bob Brown says Mr Rudd has caved in to Mr Abbott's attack on the ETS.

"If it is true, it is quite irresponsible because it signifies a climate change collapse by the Government in the face of the right-wing criticism from the Opposition and others that it is a great big tax," he said.

Mr Brown says the Government could do a deal with the Greens, but lacks the political will to do so.

"Climate change is real. It is stalking Australia. It is threatening the Great Barrier Reef. It is threatening the Murray-Darling Basin," he said.

"We have seen projections of up to 90 per cent loss of productivity of the Murray-Darling Basin this century if climate change isn't tackled.

"It is up to the Australian Government to be responsibly taking the action now ... beginning with this budget."

Climate 'inconvenience'

The Opposition's climate action spokesman, Greg Hunt, says he is sceptical about the Government's agenda.

"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," he said.

"The Government is concerned about the financial impacts of their enormous impost on electricity and grocery prices and the Government is concerned about its impact on the budget."

Mr Hunt says the Government may have realised that the Senate is not going to agree to the ETS any time soon.

Resources Minister Martin Ferguson has told Radio National it is clear there is not enough support to pass the legislation.

"I think it's very clear that we don't have much hope of getting the legislation through the Senate," he said.

"We're disappointed and I'm sure the broader community is disappointed."

The Prime Minister's office is refusing to comment.

A spokeswoman for Climate Change Minister Penny Wong says the Government remains committed to the scheme as the best and cheapest way of reducing carbon pollution.

Climate concerns

The decision to shelve the ETS comes as a new survey shows climate change could be a deciding factor in the next federal election.

The poll, conducted by Auspoll on behalf of the Climate Institute, Conservation Foundation and other groups, shows climate change is still of great concern to two-thirds of Australians.

The chief executive of the Climate Institute, John Connor, says 35 per cent of voters are more likely to vote for the Rudd Government if it takes stronger action on climate change and only 16 per cent are less likely.

"About two-thirds of Australians are concerned over climate change," he said.

"We've had a lot of muck-raking and misleading advertising campaigns from big polluters but concern is still strong.

"We think that the parties that take stronger action on climate change will be rewarded at the next poll."

And Mr Connor says delaying the ETS is economically reckless.

"It's not government for the good of Australia, or the good of humanity. We are still emerging from delicate global talks," he said.

"We actually think there's been better momentum, but Australia taking an act like this really throws us back five years."