This project is aimed at evaluating recent innovative schemes for incentivizing sustainable vehicle and fuel production and financing clean transportation technology development through the industry players themselves. The first, the California Zero Emissions Vehicles (ZEV) credit scheme, is unique program that evolved over a twenty year period and was able to drive local low-emissions vehicle innovations through a mandate combined with market-based implementation mechanism. The second is a recent Cap-andTrade scheme aimed at incentivizing energy and fuel supply through market forces. The two programs, although not officially linked, are both serving similar air-quality improvement and fuel and GHG emissions reduction targets under the state’s scoping plan for better air quality and later on - reduced GHG emissions. After outlining these programs’ development and evaluating their success, this report will highlight the potential and impediments for similar programs design for implementation in Chinese cities.