With just days left until a decision must be made, government ministers insist they are still trying to win the rights to hold the United Nations summit in Adelaide in conjunction with Pacific nations, despite Turkey refusing to drop its rival bid.
Under UN rules hosting rights are decided by consensus and negotiation, not a vote.
Nine News reported on Wednesday night that Australia had ceded its hosting rights to Turkey but was still seeking a role for Pacific nations, who are on the front line of the impacts of climate change.
Pacific Island Affairs Minister Pat Conroy insisted the government was still keen to host COP31, as the 2026 conference is known, but conceded the diplomatic battle may not go Australia's way.
"We've said that we would not veto Turkey if they were chosen," he told ABC Radio.
"They haven't been chosen yet, but we would not veto it."
If Australia and Turkey can't agree on hosting rights then the conference will be held at the UN climate headquarters in Germany, an outcome Mr Conroy said he was keen to avoid.
The Turkish embassy in Australia said the Pacific would be taken into account if COP31 were held in the resort city of Antalya.
"We will ensure that no one is left behind, particularly the regions that are most adversely affected by climate change including the Pacific," the embassy said in a statement to AAP.
"The Mediterranean on the other hand, is a recognised climate hotspot warming 20 per cent faster than the global average, and facing growing threats from extreme heat, water scarcity and biodiversity loss."
The embassy also argued Turkey was well-positioned to bridge the gap on climate policy between developed and developing nations.
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