What role for aviation in climate policy?

Abstract This paper presents an economic analysis of the reduction of carbon emissions in the aviation sector. Aviation and shipping are both international and have high carbon abatement costs so both sectors can learn from each other. To what extent should we prioritize emission reductions in the aviation sector and what is the best way to do this. Climate change is a world public bad, and this results in too low mitigation efforts when countries pursue their own objectives. Pledges in the framework of international agreements like the Paris agreement for domestic aviation and the Corsia agreement for international aviation are unlikely to produce their full effects because the agreements are not enforceable. The effectiveness of three policy levers is examined in more detail. First, the European climate policy with the SAF blending mandate and the integration of domestic aviation in the European economy wide tradable emission system. Second the effectiveness of the Corsia agreement. Third, the possibilities of a fuel efficiency mandate imposed by the EU and or the US on their domestic aircraft producer.