This paper discusses the contribution that kerosene taxes could make to decarbonising
international air travel post COVID-19. Reaching climate neutrality by mid-century
requires that all sectors, including aviation, cut emissions strongly. The paper argues
that clarity on decarbonisation targets, including through carbon price signals in
the form of kerosene taxes, will support an orderly transition in aviation. A gradually
increasing tax on kerosene can strengthen the incentives for investment and innovation
in clean aviation technologies. Taxing kerosene would also provide implementing countries
with tax revenues that could be used to support clean investment and innovation, while
addressing competitiveness and equity issues. Where legal obstacles to taxing kerosene
exist, these can be overcome by renegotiating the relevant air service agreements.