Environmentalists Against the Jones Act

The Jones Act (codified as the Merchant Marine Act of 1920) is a fairly obscure statute. But many market-based policy wonks agree that the protectionist regulation is much more far-reaching and destructive to commerce and innovation than one might expect. And the coalition of Jones Act critiquers just gained another group: environmentalists. 

To understand why environmentalists have recently gone against Jones Act, it’s important to understand the problems this regulation causes. . The Jones Act is well summarized by a recent, very witty six-minute video produced by Reason. But if you would like an explanation on paper (and one that is a little less sarcastic), you need to know that the Jones Act began as a defense of our nation’s transport reliability and devolved into the regulatory protectionism we see today. 

This act requires that any vessels shipping goods in between American ports (otherwise known as cabotage) be built, owned, and operated by American citizens. After foreign ships were called back to Europe to fight in World War I, the United States grew concerned about the reliability of our shipping if we grew too reliant on non-American ships. But after this regulation was passed, it did not necessarily increase reliability – it just made things much harder and more expensive to ship by sea, increasing land-based transportation and discouraging various ventures. 

So why does that bother environmentalists?. This has come alongside one key push in a diversified energy grid – offshore wind. To ship things out to offshore locations, and between ports as necessary, developers are forced to be in compliance with the Jones Act. This makes the whole venture more expensive, difficult to develop, and has even forced some developers to operate out of Canadian ports, a further distance from the project to be compliant. 

In discussing the ways the Jones Act hampers offshore wind development, Colin Grabow of the Cato Institute wrote:

“The Jones Act’s harm to this sector has also been recently highlighted by energy industry observers. Rystad Energy, for example, last month cited the Jones Act as a key reason why the United States is falling behind other regions of the world in the development of offshore wind while a new report from IHS Markit says the Jones Act must be relaxed if the United States is to meet its offshore wind targets.” 

The Jones Act interferes in our budding offshore wind energy growth is a perfect example of how big government regulation interferes with market-based environmentalism. This is one issue where market-based policy supporters and even the most market-hating environmentalists can find themselves in the same boat (pun fully intended). If we want to see innovation help us heal our environment and build a better energy grid, we must roll back the regulation that stands in the way of accomplishing these goals.