“Labor has never tried to explain the fine print – and little wonder.”

While two Liberal senators chose to vote in favour of the emissions trading scheme, the combination of the remaining Liberals, the Nationals, the Greens and others was more than enough to vote it down.

Climate Change Minister Penny Wong said the government would not give up on the ETS and accused the Opposition of trying to spook voters.

“When you cannot fight the argument you run a scare campaign," the Australian quoted her as saying.

"These are people sprinting back to the past. They are sham arguments from people driven, and now led, by people who do not believe climate change is real."

The fate of the legislation was put into doubt after Tony Abbott was voted leader of the Opposition over Malcolm Turnbull.