Under Lucas v. South Carolina Coastal Council, 505 U.S. 1003 (1992), the Supreme Court established the total takings test. This means that if government regulation deprives an owner of all economically beneficial use, a taking has occurred and just compensation must be provided.
Justice Stevens in dissent argued against requiring compensation for such government action, but in doing so inadvertently made a persuasive argument in favor of requiring compensation for lesser restrictions of property rights.
"The new rule created by the court is arbitrary because a landowner whose property is diminished in value 95% recovers nothing while an owner whose property is diminished 100% recovers the land’s full value."
Justice Stevens was right in principle, if not in intent. When government substantially restricts the use of private property through regulation, it takes from the owner a portion of the value of that property and should be subject to just compensation under the takings clause of the Fifth Amendment.
If this principle were to be applied through judicial construction or constitutional amendment, government regulations that have only incidental negative impact on property owners would not be affected. However, if government wanted to impose a regulation that did remove a substantial ownership interest, or imposed a substantial cost, it would be recognized as a partial taking and would require just compensation.
The practical effect would be that the EPA could restrict carbon dioxide emissions all it wanted, but only by purchasing the right to emit from property owners at fair market value. More broadly applied, it would be a powerful bulwark against expansion of the regulatory state by limiting economic regulation to those things the public was willing to pay for.
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