You may have read in the news recently that California governor Jerry Brown is currently attempting to negotiate with Tesla so that the corporation will consider constructing its lithium-ion cell gigafactory in the Golden State. This negotiation is incredibly controversial for one simple reason. Yes, it is generally in California’s best interests to serve as a pro-business state so that companies will want to move here and stay here. However, the Tesla negotiation scandal remains controversial because in order to get Tesla to build the gigafactory in California, the governor may have to waive a critical environmental law that has been in place for decades.

When businesses break state environmental laws in California, they are generally investigated in regards to their environmental law violations and may be punished extensively. Tesla is essentially insisting upon an incentives package that includes waiver of numerous provisions within the California Environmental Quality Act. How can California remain pro-business if it waives environmental laws for one company but not others?

It seems to many that Tesla is playing hardball with the governor, given that the company is headquartered in California already but refused to put California on its short-list of states in which it may build its new gigafactory. Giving into this kind of pressure could set a dangerous precedent. It is ultimately inappropriate and arguably dangerous to waive environmental laws for some companies willing to dig their heels in and to punish others for violating the very same laws on the very same stretches of land. 

Source: Christian Science Monitor, “Tesla ‘gigafactory’: Will California waive environmental laws to get it?” Stephen Edelstein, Aug. 12, 2014