Rethinking the Jones Act in a Warming World

Abstract

Just over a century ago, Congress passed the Merchant Marine Act of 1920. Section 27 of the Act, known as the Jones Act, regulates American coastwise shipping, which refers to the transportation of cargo between ports of the same country. Under the Jones Act, only ships that are American built, American owned, and American flagged may participate in American coastwise shipping. The Department of Homeland Security may waive the Act in the interest of national defense, but the waiver process is bureaucratic and rarely successful. Although the Act yields several benefits, the Act dramatically increases coastwise shipping prices and imposes significant indirect costs on the United States. Specifically, the Act contributes to climate change by driving shippers to use more pollutive modes of transportation. This is seemingly at odds with President Biden's "whole-of-government" approach to responding and adapting to climate change's effects. Thus, this Note examines whether the Jones Act is compatible with current climate policy. Although it concedes that the Jones Act should remain because of its benefits, this Note nonetheless concludes that the Act requires significant reform to accord with modern climate policy, including eliminating the American-build requirement, reviving operating-differential subsidies, and expanding access to waivers.