Australia's future at risk: PM

The Australian Senate rejected an emissions trading scheme that aims to cut carbon pollution by up to 25 percent over the next decade.  

The Opposition joined forces with the Greens and independent senators to vote down the planned scheme 42 votes to 30.

 The ETS explained: How it will affect you

Mr RUDD says it's a very disappointing day for Australia because the Liberal party and the National party weren’t united enough to develop a policy on climate change.

He says the government will look at possible amendments to its emissions trading scheme once the coalition finally adopts a policy.

Scheme likely to be re-introduced

The Senate's rejection forces the government's emissions trading legislation into parliamentary limbo for at least the next three months.

Climate Change Minister Penny Wong condemned the decision, accusing the opposition of fear-mongering about the impact of the proposed scheme, which the government wants finalised before UN climate talks in Copenhagen in December.

 "It's not smart to pretend this won't leave us isolated from the rest of the world, and it's not smart to undermine our transition to a low-carbon economy," she told the Senate.

 "This bill may be going down today but this is not the end."