Deterred by strident opposition to emission curbs, the Kevin Rudd government is now settling for a legislation that would focus only on renewable energy targets.
A combined package of climate-change laws was rejected by the Senate last week. The Opposition parties want to support the 20 per cent renewable energy target, but say they can not because the Government linked the legislation to the contentious emissions trading scheme.
The Carbon Pollution Reduction Scheme proposed by the government had had sought to create an economic incentive to cut emissions by forcing heavy polluters to buy carbon credits, as is in force in Europe.
The Greens and the Opposition have now put forward amendments that would split the bills.
Deputy Prime Minister Julia Gillard told Channel Nine they had been brought forward together in the first place because of their "integrated compensation package".
"This isn't the best way to do it ... [but] We are safeguarding our Renewable Energy Target legislation, so it can come into effect even if the Liberal party continues to block the Carbon Pollution Reduction Scheme," she said.
If voted through, the legislation would unlock a potential $22 billion in planned renewable investment
Opposition Leader Malcolm Turnbull had not been able to exercise any leadership on behalf of the Liberal Party, which thought the easy political position was to obstruct the government's legislation, Ms Gillard said.
"Of course, that is the worst position for the nation," he said.
"Mr Turnbull is presiding over a rabble under the banner of the Liberal Party.
"His political party straddles those from people who deny the science of climate change, who simply don't think it's happening, through to people who do believe that the Liberal Party should support the Government's legislation."
Emissions from Australia will rise to 120 percent of the 2000 level without a pollution reduction plan, Climate Change Minister Penny Wong said earlier this month.
Australia, the world's biggest coal exporter, was proposing to reduce greenhouse gases by between as much as 15 percent from 2000 levels in the next decade. Rudd plans to increase the goal to 25 percent pending an international accord stabilizing carbon levels.
But industrial lobbies proving powerful, the federal government is opting for a path of least resistance.
The government wants the legislation in place before a meeting of 200 countries in December in Copenhagen to replace the Kyoto Protocol. China and the U.S., the world's largest polluters, haven't committed to targets for cutting emissions.