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The majority of the world's aircraft are not large jetliners but smaller piston aircraft, and many are capable of using ethanol as a fuel, with major modifications. While ethanol also releases CO2 during combustion, the plants cultivated to make it draw that same CO2 out of the atmosphere while they are growing, making the fuel closer to climate-change-neutral. The only problem is the US government's choice of using ethanol from corn, since it takes more energy to produce than is returned, it displaces food crops and thus raises the price of food, and causes soil degradation.

While they are not suitable for long-haul or transoceanic flights, turboprop aircraft used for commuter flights bring two significant benefits: they often burn considerably less fuel per passenger mile, and they typically fly at lower altitudes, well inside the tropopause, where there are no concerns about ozone or contrail production.

An alternative method for reducing the environmental impact of aviation is to constrain demand for air travel. The UK study Predict and Decide - Aviation, climate change and UK policy, notes that a 10% increase in fares generates a 5% to 15% reduction in demand, and recommends that the British government should manage demand rather than provide for it. This would be accomplished via a strategy that presumes "… against the expansion of UK airport capacity" and constrains demand by the use of economic instruments to price air travel less attractively. A study published by the campaign group Aviation Environment Federation (AEF) concludes that by levying £9 billion of additional taxes, the annual rate of growth in demand in the UK for air travel would be reduced to 2%. The ninth report of the House of Commons Environmental Audit Select Committee, published in July 2006, recommends that the British government rethinks its airport expansion policy and considers ways, particularly via increased taxation, in which future demand can be managed in line with industry performance in achieving fuel efficiencies, so that emissions are not allowed to increase in absolute terms.

Greenhouse gas emissions from fuel consumption in international aviation, in contrast to those from domestic aviation and from energy use by airports, are not assigned under the first round of the Kyoto Protocol, neither are the non-CO2 climate effects. In place of agreement, Governments agreed to work through the International Civil Aviation Organization (ICAO) to limit or reduce emissions and to find a solution to the allocation of emissions from international aviation in time for the second round of Kyoto in 2009 in Copenhagen.

As part of that process the ICAO has endorsed the adoption of an open emissions trading system to meet CO2 emissions reduction objectives. Guidelines for the adoption and implementation of a global scheme are currently being developed, and will be presented to the ICAO Assembly in 2007, although the prospects of a comprehensive inter-governmental agreement on the adoption of such a scheme are uncertain.

Within the European Union, however, the European Commission has resolved to incorporate aviation in the European Union Emissions Trading Scheme (ETS). A new directive has been adopted by the European Parliament in July 2008 and approved by the Council in October 2008. It will enter into force on 1 January 2012.