Juan Moreno-Cruz

An Economic Anatomy of Optimal Climate Policy

In a recent paper, Juan Moreno-Cruz and his co-authors introduce geoengineering into an optimal control model of climate change economics. Together with mitigation and adaptation, carbon and solar geoengineering span the universe of possible climate policies. In the context of their model, the authors show that a carbon tax is the optimal response to the unpriced carbon externality only if it equals the marginal cost of carbon geoengineering; that the introduction of solar geoengineering leads to higher emissions yet lower temperatures, and, thus, increased welfare; and finally that solar geoengineering, in effect, is a public goods version of adaptation that also lowers temperatures

While at CESifo, Juan Moreno-Cruz will be working on expanding the framework introduced in the aforementioned study in two distinct directions. First, he plans to incorporate uncertainty about climate sensitivity and carbon and solar geoengineering damages. Second, he plans to explicitly work on issues of strategic interaction and how international environmental agreements are altered in the presence of these alternative instruments.

Juan Moreno-Cruz is an Associate Professor in the School of Economics at Georgia Institute of Technology. He earned his PhD in Economics from the University of Calgary in Canada and his BSc and MSc in Electrical Engineering from the Universidad de Los Andes in Colombia. Mr Moreno-Cruz started at Georgia Tech in August 2011, where he has worked on energy and environmental economics, in particular on questions related to climate change and energy transitions. He was recently awarded a grant from the National Academy of Sciences to work on spatial energy consumption and regional air quality. His work has influenced the direction of geoengineering research and policy and has been published in high impact journals such as Nature Geosciences, PNAS, Science, Climatic Change, Energy and Environmental Economics, and Resource and Energy Economics. Mr Moreno-Cruz is also a Brook Byers Institute for Sustainable Systems Fellow and a Kavli Frontiers of Science Fellow.