The government has shelved its emissions trading scheme for at least three years, in the hopes that in that time it will garner enough domestic support to pass it through the Senate.

The Carbon Pollution Reduction Scheme (CPRS) was proposed more than a year ago and was meant to start this year. It failed to pass the Senate a number of times.

The Prime Minister’s office has not yet commented on the news, which leaked out this morning with the release of four year forward estimates in the budget. The decision to keep the CPRS out until at least 2013 will save the government $2.5 billion; household and industry compensation would have exceeded the revenue generated by the scheme in its early years.