Australian Prime Minister Kevin Rudd on Tuesday announced that his Labour government is suspending the carbon emissions trading scheme (ETS) until 2012, which is a complete reversal from one of his key election promises.

The Premier said Australia would wait until 2012 to coincide with the expiration of the Kyoto agreement. By then, governments across the globe will need to redefine their carbon reduction commitments. Australia will also re-examine its position on the matter by 2012.

"That will provide the Australian Government at the time with a better position to assess the level of global action on climate change," he said.

The proposed ETS was designed to reduce Australia's carbon emissions by 5 percent of 2000 levels by 2020 and at the same time provides ample concessions to energy intensive industries.

The proposal was rejected by the opposition, including the Green Party in the Senate twice last year. It is facing certain defeat before the Parliament this year.

Rudd complained that the lack of support from the opposition as well as the slow progress on climate change response across the world, forced him to delay the plan.

His decision to back away from his commitment to the ETS drew quick criticism. Rudd is accused of abandoning one of the "great moral and economic challenges of our time."

During the elections in 2007 which catapulted him to power, the pledge to reduce Australia's greenhouse gas emission was one of the mainstays of his campaign. Opinion polls also showed big public support for the government to take action on climate change.

However, economists, business groups, scientists, opposition politicians and environmentalists have always been at sharp odds over the issue.

Australia's decision to abandon its ETS commitment is a major blow to global campaign on climate change after a meeting of world leaders in Copenhagen on the issue failed to reach a consensus last year, as well as the move by the Obama administration to back away from the ETS.