A new paper offers a policy road map for expanding U.S. production of sustainable aviation fuel — a move researchers say could cut climate pollution while offering a lifeline to ethanol producers buffeted by tariffs and the rise of electric vehicles.
The working paper, published Monday by the nonprofit National Bureau of Economic Research, outlines how the U.S. could meet the Biden-era goal of producing 3 billion gallons of sustainable aviation fuel annually by 2030. The least costly, lowest-emissions option would be to eliminate all biofuel mandates and subsidies — and replace them with a carbon tax of $15 per ton of emissions and a tax credit of $4.41 per gallon of SAF, according to the paper.
That unlikely scenario serves as a “nice benchmark” for a slew of other possibilities, said Harvard University political economy professor James Stock, one of the paper’s co-authors.
“There are various, maybe more politically viable, policies that could be done,” said Stock, who served on the president’s Council of Economic Advisers during the Obama administration. Those include creating a sustainable aviation fuel tax, modifying the renewable fuels standard to encourage SAF production, and implementing a national aviation fuel emissions intensity standard.
