The Australian Senate voted 39-31 to repeal a 2012 law that charged the nation's top polluters around $22 for every ton of greenhouse gases they produce.
John Connor, chief executive officer at The Climate Institute, said the repeal was a monumental step backward from one of the biggest emerging economies in the world.
"Today's repeal of laws that price and limit carbon pollution is an historic act of irresponsibility and recklessness," he said in a statement Thursday.
Connor's organization said there are few alternative polices in place in Canberra that can reduce emissions by their target 5 percent of their 2000 levels by 2020. The government's own economic data show emissions will increase by 30 percent over the next 15 years without a credible mechanism to curb pollution, he said.
Prime Minister Tony Abbott vowed to repeal the measure when his Liberal-National coalition took power last year.
His government said the carbon measure caused energy prices to go up and cost the economy jobs because companies were forced to pay more in taxes. He said he favored a policy that would use taxpayer money to pay industries to cut emissions and use more renewable energy resources.
"Scrapping the carbon tax is a foundation of the government's economic action strategy," he said.