Governments, and therefore taxpayers, could be saddled with enormous costs as global temperatures increase over the coming years. One aspect of these costs is the money governments in the United States must pay to private property owners as compensation if governments use eminent domain to acquire private property in order to modernize infrastructure to accommodate huge shifts in population density. Some obscure aspects of Compensation Clause doctrine might provide a roadmap for minimizing costs.
A ProPublica report from 2020 explains that there is an ideal human climate niche—an area with water, temperatures, and other climatic factors that make the area livable and productive. In the United States today, the ideal niche covers most of the eastern seaboard from southern New England to middle Georgia and stretches westward to about the western boarder of the Dakotas, Nebraska, and Oklahoma. As the world warms, that niche will shift northward. At 4°C warming, places like the Great Lakes region and central and the northern Appalachians will be among the only places left in the United States for significant human populations to persist.
When this shift happens, there will be massive population shifts with people migrating from “sending zones” like the coasts, the Southwest, and Southeast to “receiving zones” like the Great Lakes region. With population increases of possibly 200 million people in the receiving zones, governments will have to play a massive role to avoid chaos, preparing receiving-zone infrastructure to support transportation, housing, water management, and other necessities for dense, growing populations. The problem is that the Constitution can make this difficult.
The Takings Clause of the Fifth Amendment provides governments “eminent domain” authority to take property from private owners so long as the government puts property to public use. The takings power will be essential as governments acquire property for things like roads, reservoirs, treatment plants, mass transit, schools, police stations, military bases, shelters, cooling stations, and much more. Most of this infrastructure already exists, but dramatically shifting populations will require new concentrations of, and updates to, infrastructure in receiving zones. Fortunately, at least as an initial matter, the Constitution’s Takings Clause makes this massive infrastructure program possible because these uses clearly serve a public purpose apparent even to those who refuse to understand climate change.
Of course, the Compensation Clause requires governments to pay for any property they acquire through eminent domain. In that way, it makes sense to think of government takings as a forced sale of property. The government must pay the former owner fair market value for taken property. The U.S. Supreme Court has taken the Compensation Clause further and said that even if governments do not take ownership of property, they must still pay compensation if a regulation imposes a sufficient burden on the property. Therefore, whether a government intentionally takes ownership of property or designs regulations to address climate migrations, there will be a cost to this land-acquisition authority. This is particularly true considering that receiving zones will be among the only places where people can survive under a 4°C warming scenario and there will, therefore, be huge demand for property in these areas, pushing up values and the costs of government compensation.
How will the government afford to compensate property owners in a 4°C world, where the need for government intervention will be so stark?
There are two ways to approach this question. First, governments can capitalize on mass population shifts to raise money that will pay for compensation. With respect to this fundraising question, traditional strategies like raising tax revenue seem plausible, but the volatility of a 4°C economy might make the tax strategy difficult. Another option is to leverage newly available property in sending zones. If people are fleeing Florida because of flooding, Los Angeles because of drought, and Louisiana because of heat and humidity, governments may be able to obtain property in those areas at very low cost. The ability of a government to add value by taking and then consolidating land in sending zones might make the properties more attractive to speculators who are unwilling to take the risk of parcel-by-parcel acquisition but see value in consolidated tracts.
Second, governments can minimize the costs of compensation while remaining within constitutional bounds. This is a “doctrinal” strategy for reducing the costs of takings in the receiving zones. Courts measure just compensation by the fair market value of a property. Experts estimate what a willing buyer would pay a willing seller, and that is the amount the government pays the former owner. Although the calculation is not always simple, in practice the principle is at least easy to understand.
Things get more complicated when we are dealing with a “partial taking.” A partial taking occurs when the government does not acquire an entire property, but only part of the property, leaving the owner with a “remainder.” For example, in order to enlarge a road, a government might take 10 feet of property from 25 homeowners, leaving those homeowners with the majority of their property remaining in their possession. The government, of course, must pay for the slice of the lot it has taken, but factoring in the remainder property can change the calculation.
Suppose a government project, like the road widening, provides a financial benefit to the remainder property. The Supreme Court has written that “just compensation” must be just to both the person from whom the property was taken and to the public. In other words, while the government must pay, it must not overpay. If a government project creates a measurable benefit to remainder property, and the compensation does not account for that benefit, then the landowner may get a windfall from both the direct payment and an increase in the remainder property’s value. This is unjust for the public, which ultimately pays the compensation through tax dollars.
Over the years, the Court has developed a test for deciding what sort of benefits it will offset from compensation and what sort of benefits will leave the compensation unchanged. Broadly speaking, the Court allows “special benefits” to be subtracted from compensation, but it does not allow subtraction of “general benefits.” The way the Court has defined these terms is a jumbled mess, and certain doctrinal tweaks may be necessary to make the most sense of this area of law, particularly in light of the need for government intervention at 4°C. But the important concept is that certain types of government infrastructure and planning projects will generate enough clear and calculable financial benefit to remainder properties that the government will not have to offer any additional cash compensation.
This offsetting suggests a possible strategy for compensation at 4°C. When a government acquires property in climate receiving zones in order to make those zones inhabitable for vastly larger populations, the government should consider two things. First, governments should make efforts not to take entire properties. Leaving a remainder property creates a potential for reducing costs by generating benefits to the remainder. Second, governments should thoughtfully, carefully, and explicitly identify financial benefits to the remainder so that courts can easily understand the way a project provides in-kind compensation that can offset cash payments. There is little question that drinkable water, efficient transportation, public safety services, and reliable electricity provide significant benefits to property owners who rely on them. When properly structured, 4°C infrastructure projects can use these significant benefits to reduce the cost, keeping the United States functioning in the warming world.
Authored by:
- Josh Galperin, Assistant Professor of Law at the Elisabeth Haub School of Law at Pace University.