sustainability Article How Much Can Carbon Taxes Contribute to Aviation Decarbonization by 2050 Rosa Maria Arnaldo Valdés 1, * , Victor Fernando Gomez Comendador 1 and Luis Manuel Braga Campos 2   Citation: Valdés, R.M.A.; Comendador, V.F.G.; Campos, L.M.B. How Much Can Carbon Taxes Contribute to Aviation Decarbonization by 2050. Sustainability 2021, 13, 1086. https://doi.org/10.3390/su13031086 Received: 30 December 2020 Accepted: 19 January 2021 Published: 21 January 2021 Publisher’s Note: MDPI stays neutral with regard to jurisdictional claims in published maps and institutional affil- iations. Copyright: © 2021 by the authors. Licensee MDPI, Basel, Switzerland. This article is an open access article distributed under the terms and conditions of the Creative Commons Attribution (CC BY) license (https:// creativecommons.org/licenses/by/ 4.0/). 1 School of Aerospace Engineering, Universidad Politecnica de Madrid, Plaza Cardenal Cisneros N 3, 28040 Madrid, Spain; fernando.gcomendador@upm.es 2 Centro de Ciencas e Tecnologias aeronauticas e Espaciais, Instituto Superior Técnico Lisboa, 1049-001 Lisboa, Portugal; luis.campos@tecnico.ulisboa.pt * Correspondence: rosamaria.arnaldo@upm.es; Tel.: +34-636708530 Abstract: Aviation emissions from 2016 to 2050 could consume between 12% and 27% of the re- maining carbon budget to keep global temperature rise below 1.5 ◦ C above preindustrial levels. Consequently, aviation is being challenged to immediately start to reduce its in-sector emissions, then sharply reduce its CO 2 emissions and fully decarbonize toward the second half of this century. Among the analyses carried out within the Horizon 2020 project PARE—Perspectives for Aeronautical Research in Europe, this paper tackles the potential role of climate change levy schemes in achieving the ambitious objective of aviation decarbonization by the year 2050. Keywords: aviation; decarbonization; climate; levy; taxes 1. Introduction According to International Civil Aviation Organization (ICAO), aviation is responsible for 2% of global CO 2 emissions [1]. However, it is expected to occupy an increasingly large share if it continues to grow as foreseen (5% annually), as other sectors are seeking to reduce their emissions in line with their carbon budgets [2]. Although the international aviation community aspires to a 2% annual improvement in fuel efficiency and a carbon neutral industry growth from year 2020 onwards, the achievement of this goal is still at risk. Even if achieved, aviation will still produce by 2050 a significant amount of CO 2 , which might endanger the achievement of the goals of the Paris Agreement [3]. An ICAO report from 2019 [1] quantified emissions of the aviation sector over the period 2016–2050 as between 56 GtCO 2 in a business-as-usual scenario and 12 GtCO 2 in an optimistic, but unlikely-to-meet, scenario with technological improvements and 100% use of biofuels. These figures suggest that aviation emissions, from 2016 to 2050, could consume between 27% and 12% of the remaining carbon budget to keep global temperature rise below 1.5 ◦ C above preindustrial levels [4]. Up until now, the aviation industry based its approach to decarbonization on four pillars of climate action: new technology; substitute fuels; optimized operations of current aircraft; and infrastructure improvements [5–7]. Global market-based (GMB) measures could help to offset the residual CO 2 emissions that cannot be reduced through these alternatives [8–10]. Much attention has been devoted to a market-based instrument [11], the climate change levy (CCL) schemes [12,13], mostly at national and local levels [14,15]. Recent reports [16,17] claimed that the new technology and operations improvements will not be enough to mitigate the predictable fuel demand and CO 2 emissions growth from aviation, and further measures would be required. Those authors believe carbon pricing will play a vital role in conveying further reductions in CO 2 emissions and fuel demand. This analysis attempts to gather analytics and insights to answer the question of how taxing CO 2 emissions (climate change levy schemes) will lead to significant changes Sustainability 2021, 13, 1086. https://doi.org/10.3390/su13031086 https://www.mdpi.com/journal/sustainability