A recent story on NPR profiled a new project being conducted by the CDC to find a natural, non-toxic bug repellant. The good news: Scientists are honing in on a chemical called nootkatone, basically a natural essential oil found in the Alaska yellow cedar trees and citrus fruit like grapefruit.
Nootkatone apparently smells citrusy, and as an already-approved food additive (like citrus beverages), it's officially classed as "Generally Considered Safe." And it's super effective at repelling ticks and mosquitoes. According to the article, one scientist rubbed some on his hand, stuck it in a jar of hungry mosquitoes and after 5 minutes still had no bites.
The chemical is also being engineered as an insecticide, which also offers hope for an effective pest killer that's also biodegradable. The CDC owns patents on the chemical, but has licensed them to two companies that are working on bringing the products to the market.