A lot of people claim this decision is what lead to Kevin Rudd becoming unpopular - he was elected partly on this policy, which he described as needed to address the greatest moral challenge of this time, so when he backed down, he not only broke an election promise, he made it clear he wasn't even willing to fight for things he regarded as extremely important - even those who didn't want carbon trading held it against him, because you don't want a weak Prime Minister who throws in the towel when things get hard.
What's going to happen now is anybody's guess really - if reelected Julia Gillard may bring it back - she should based on what she's said in the past, but this close an election gives coverage to change plans. Tony Abbott wouldn't want to bring it back - but the Greens hold the balance of power in the Senate now, and also have representation in the House of Representatives for the first time - it's a deal that may have to be made to get other legislation through. We just don't know.