Australia shelved plans to embed carbon emissions targets in law Monday, after a party revolt against embattled Prime Minister Malcolm Turnbull.
With its heavy use of coal-fired power and relatively small population of 25 million, Australia is considered one of the world's worst per capita greenhouse gas polluters.
Turnbull's predecessor Tony Abbott was in charge when Canberra agreed to cut emissions by 26 percent by 2030 as part of the so-called Paris Agreement.
But Abbott, who was ousted by moderate Turnbull in a Liberal party coup three years ago and once declared climate change "absolute crap", has since railed against the committment he made.
He has argued it should not be enshrined in law as part of the government's new energy policy, known as the National Energy Guarantee (NEG), as consumers complain about soaring electricity prices.
"As long as we are in it (Paris) we will be running our power system to reduce emissions, not to give us affordable, reliable power," Abbott, now a vocal backbencher, said on Monday.
Several right-wingers allied to Abbott had threatened to vote with the opposition to block the NEG, and with the government only having a wafer-thin parliamentary majority, it was doomed in its current form.
Turnbull admitted there was not enough support for the bill as he ditched plans to try to legislate the targets -- an embarrassing u-turn to a key element of his signature policy.
"We are parties to the Paris agreement and the government has committed to that, but the simple reality is that we need to have effectively all of our members in the House of Representatives to vote with the government to carry legislation," he said.
"At this stage, we don't have that."
The backdown does not mean Australia has abandoned its commitment to the UN climate agreement, only that it has postponed indefinitely any attempt to make the target enforceable through law.
But closing ageing coal-fired power stations and a troubled transition to clean energy has seen power bills soar.
Internal disunity over the issue came to a head at the weekend with rampant speculation that Home Affairs Minister Peter Dutton could challenge Turnbull for the Liberal leadership, a move he denied.
It comes with a new poll showing the government lagging even further behind the Labor opposition -- 45 to 55 percent on a two-party basis -- and national elections due by mid-May next year.