Environmental Costs of the Jones Act

Abstract

An often overlooked aspect of the Jones Act is its environmental effects. By raising the cost of waterborne transportation, the law encourages the use of alternative forms of transport such as trucks and rail. These alternative means of moving goods generate more greenhouse gases and emit pollutants that are in many ways more harmful than those emitted by waterborne transport. Moreover, the Jones Act encourages the use of older, less‐​efficient vessels. Thus, the Jones Act contributes to an environment that is more despoiled than would otherwise be the case in the law’s absence.

This paper presents a detailed examination of the potential environmental gains that could be realized from reform or repeal of the law. It estimates that the environmental benefits accruing from the law’s repeal, through expanded use of waterborne transport as well as newer, more efficient vessels, would exceed $8 billion per year. Such gains are rarely estimated, if they are even considered.

To mitigate the adverse effects that transportation has on the environment, policymakers should acknowledge that the Jones Act encourages businesses to use less environmentally friendly forms of transport. Repeal of the Jones Act—or even a more limited set of reforms—would both promote economic growth and a cleaner environment.

Keywords: Jones Act, trade, environmental impacts, tariff, transportation, freight transport, transportation vessels, rail transportation, shipping

JEL Classification: F00, F1, F10, F12, F13, F16, F18, F19