The U.S. Constitution prohibits national and state governments from taking private property for public use without just compensation. Last April, the Supreme Court unanimously overturned California’s claim that these constitutional protections do not apply to takings permitted by legislation. Though technical in nature, the decision increases the likelihood that state climate policies, authorized by a skeletal statutory patchwork and used by unelected state and local bureaucrats to curtail property rights on a massive scale, will soon face takings liability in the courts. At the very least, constitutional scrutiny may finally force climate advocates to obtain explicit voter approval for their programs, much as prohibitionists a century ago secured a constitutional amendment before enacting a national alcohol ban.
Takings law is “ad hoc” and “fact specific.” If governments pay just compensation, they can confiscate and transfer housing to renters or seize property for private developers. Almost any physical property intrusion, even something as minuscule as a residential cable-box mandate, requires compensation. Permit applicants can be forced to provide land or cash reasonably to address project impacts without compensation, but regulators can’t take their property for unreasonable or unrelated purposes.
California was among a handful of states that invented a legislative exception for takings liability. In rejecting this invention, the Supreme Court found that “nothing in constitutional text, history, or precedent supports exempting legislatures from ordinary takings rules.” As a result, state climate programs are more clearly vulnerable to constitutional takings challenges. And California’s war on climate change curtails property rights on an unprecedented scale.
In 2021, for example, Governor Gavin Newsom directed state agencies to include “phasing out oil extraction” as “a part of California’s blueprint to achieve economy-wide carbon neutrality by 2045.” Despite warnings from the state Legislative Analyst’s Office that banning oil and gas extraction would reduce tax revenues by hundreds of millions of dollars and risk multibillion-dollar takings claims by mineral rights holders, the state’s climate bureaucracy included a complete phaseout in California’s climate-planning models. Though regulators subsequently conceded that future in-state extraction might be unavoidable, up to 89 percent of extraction activity would still be eliminated.
In addition, climate plans require that the “majority” of in-state oil refineries—and all in-state manufacturing of cement, glass, clay, and stone—use carbon capture and sequestration (CCS) technology to trap, compress, transport, and isolate emissions from the atmosphere. As even the litigation-shy national association of electric utilities as well as other parties have reported in a new lawsuit, and numerous experts and other parties have observed during rulemaking proceedings, no proven, cost-effective CCS capacity at scale for capturing emissions from multiple sources at distant sequestration facilities exists in California or anywhere else, and noncompliance with state mandates would require that affected operations be shut down. The planned severe curtailment and potential elimination of California’s oil, gas, cement, and materials industries alone, which generate more than $100 billion in business per year and employ hundreds of thousands of residents, exposes the state to an enormous takings liability.
California’s climate policies also impose remarkably intrusive and expensive residential mandates. By 2045, more than 11 million gas water heaters, 90 percent of the state’s existing residential stock, must be scrapped and replaced with heat-pump technology. Another 11 million existing gas and electric resistance systems, favored by the vast majority of California households, must be eliminated to install heat-pump space heaters. More than 7 million gas and propane stoves, used in 70 percent of all residential kitchens, must be removed to make way for government-approved “green” cookstoves. In 20 years, battery- or hydrogen-powered cars must displace 21 million gas-powered personal vehicles, 94 percent of the state’s existing residential vehicle stock.
These mandates will intrude into private homes to a far greater extent than the cable-connection installations for which the Supreme Court required just compensation. The median cost of installing a residential-space heat pump is more than $18,000 in California, and in some cases exceeds $50,000. Heat-pump water heaters cost much more than gas units, and they won’t work in colder temperature; their median installation cost is $6,300. Residential electric-vehicle charger installations cost an average of $1,000 to $2,500 but can be far more expensive if electric panel and wiring upgrades are also needed. Multiplied by millions of households, these costs amount to an astronomical potential takings liability.
These residential regulatory takings go further, though: under California law, existing homes for which homeowners and landlords can’t afford to spend tens of thousands of dollars, and endure multi-month permitting and construction delays, to restore heating systems so that they are capable of maintaining room temperatures of 70 degrees three feet above the floor and hot water of at least 105 degrees will be considered illegal dwelling units. Instead of a quick trip to a local appliance store and two hours of labor to replace a broken hot-water heater, residents can wait in fear (without heat or hot showers) of receiving a “red tag” notice requiring that they move out until these costly systems are replaced, thus deepening California’s notorious housing crisis and worst-in-the-nation poverty rate. Since California counts departing residents (and jobs), with their corresponding building vacancies and unsold electricity and fuel, as reductions in greenhouse gas emissions, regulatory bean-counters can hail evictions that prompt further population loss as a climate win—even as the exiles relocate to states with per-capita emissions double or even triple California’s.
California may try to evade just-compensation risks by likening climate change to a world war, as some advocates have proposed. Courts have been loath to require government compensation for wartime property loss, but even fervent climate activists have recognized that climate change is nothing like a war. The “enemy” is the global emissions caused by the entire human population. Unlike the immediate danger created by an invading military, the magnitude and timing of potential climate challenges remain elusive. Alarmed by increasingly irrational climate panic, even alarmist scientists are cautioning against unfounded “doomism.” Many experts believe that well-publicized “worst-case” climate futures are in fact highly unlikely. Despite decades of refinement, climate analysis models are still riddled with uncertainty. The “social cost of carbon” calculations used to support climate action are hard to substantiate, particularly after federal agencies recently inflated them using inherently unknowable climate-harm “projections” through 2300.
America’s climate advocates would do well to review the nationwide enactment of Prohibition from 1920 to 1932. Like climate activism, prohibitionism was motivated in part by empirical trends, such as increased U.S. per capita drinking rates in 1900 to 1913, but it also reflected a panic stoked by “science” that proved baseless. Countless studies claimed that a single drink would cause lifelong addiction or risk sudden death. Medical professionals publicly advocated for euthanizing, permanently incarcerating, or sterilizing habitual drinkers to mitigate the alcohol “crisis.” Over time, temperance advocates convinced themselves that drinking “posed the greatest threat to American society” and that no “less coercive means” than total abstinence could save the nation.
Prohibition advocates also achieved widespread media and educational support. Popular entertainment and new communications outlets were overwhelmingly pro-temperance; most refused advertising from breweries. Schools adopted mandatory “Scientific Temperance Instruction” programs. Presaging today’s oft-promised “green jobs,” advocates insisted that national prohibition would be an economic bonanza, boosting demand for clothing, household goods, chewing gum, grape juice, soft drinks, theater entertainment, and restaurants, and dramatically boosting the nation’s gross national product.
But unlike climate mandates, Prohibition was imposed nationally only after securing explicit political authorization, including congressional approval and state ratification of the Eighteenth Amendment and passage of the Volstead Act, over a presidential veto. In turn, national Prohibition could constrain property rights, including the near-complete destruction of what was then the nation’s fifth-largest industry.
Climate policy enjoys no comparable constitutional deference because its advocates have deliberately sought to minimize democratic consideration and approval. Fueled by concerns that democratic politics poses too much danger for climate ambitions, activists instead pursue climate policy within a framework of extraordinarily broad greenhouse-gas reduction targets and virtually unbounded delegation to unelected bureaucracies, aligned with well-funded advocacy groups, who work out the details. The details, as California’s nonpartisan Legislative Analyst’s Office recently showed, have resulted in wealth transfers from low- and middle-income Californians to the wealthy.
Under traditional takings law, climate advocates risk potentially enormous just-compensation liability if they pursue energy transition by executive and bureaucratic fiat, which would kill millions of jobs, eliminate billions of dollars in public tax revenues, and damage America’s geopolitical goals. Alternatively, climate advocates could borrow a page from the temperance movement and minimize takings liability by asking Americans explicitly to authorize the curtailment of the nation’s oil, gas, and cement industries, as well as household mandates to eliminate gas-powered vehicles and appliances in favor of more costly replacements.
There is no constitutional exemption from takings law for climate policy. To require expansive and intrusive climate measures without voter approval would undermine representative democracy. Government agencies and climate advocates should not be allowed to treat the need to seek democratic approval as a distasteful burden to be avoided.
Photo by Lev Radin/Pacific Press/LightRocket via Getty Images