Climate Mitigation Strategies for Aviation - A Marginal Abatement Cost Perspective

Kurzfassung

Aviation is currently responsible for approximately 3 - 5 % of anthropogenic climate warming. Since air traffic is expected to grow in the future, this share is likely to increase in the coming years and decades. In the future, climate-relevant emission reductions in the air transport sector are promised by, among other strategies, the use of sustainable aviation fuels on a large scale, the use of hydrogen and further technical improvements to the airframe and engine. However, the marginal abatement costs in aviation are considerably higher compared to many other emitting sectors. This paper investigates the present marginal abatement costs in air transportation and analyzes their projected development over time. Our results indicate that, as of today, investments in low-carbon technologies and alternative fuels that do not yield operational cost savings are in most cases not economically efficient. Since other sectors competing with aviation in carbon markets - such as those covered by the EU ETS - face lower marginal abatement costs, purchasing allowances remains the most cost-effective option for aviation today. Despite rising carbon market prices and potential economies of scale, many emerging solutions offering great emission reduction potential, including hydrogen-powered aircraft and Power-to-Liquid fuels, are not expected to become economically viable before 2035. As current carbon markets alone are insufficient to drive significant in-sector emission reductions, we provide recommendations that go beyond the regulation by carbon markets, proposing mitigation or policy measures that promote cost-effective mitigation approaches.