Juan: The other 42 states do have strict emissions. California's is just/that much stricter, that's all.
All manufacturers have laws to follow governing their corporate average fuel economy (CAFE standards), safety, as well as emissions. Then the states may add to the emission levels. (States don't get into crash safety nor fuel economy).
The federal government "gave" money to GM, Ford, and Chrysler during the bailout back in 2008-2009. Honda, Nissan, and Toyota- though they manufacture here in the USA did not receive a dime. Every automaker that wants to sell cars in the USA has an incentive to improve, because the federal government laid out well-publicized targets regarding emissions and fuel economy that sellers have to hit without getting the dreaded fuel guzzler tax (about $1,300 per vehicle). If they don't hit emission targets, the cars can't be sold here.
Every few years the bar gets raised....automakers know that in year 2020, the gas guzzler tax will increase to $2,000 per vehicle and emissions must be even better- as well as the CAFE must be higher- so there is an incentive to build greener.
But the biggest incentive is money. China overtook Japan as the second largest car market two years ago, and I believe China will overtake the USA by 2020. China does not care much for safety- but they do care about emissions....read on...
Back until the early 2000s, Mexico had leaded gas, no catalytic converters, and some of the worst air in the world. As China's auto industry grew, they did not want Mexico City's level of air pollution- so they started making their cars have fewer emissions. If China is gonna make and sell cars to foreign markets- they better take the lead in emissions because it is cheaper to standardize a car for many markets than to make variations of one car for many markets.
Uncle Sam gave bail out money, and backed a loan to Tesla. Tesla's stock tripled since January of this year...TRIPLED! Their market growth will slow, but they proved the concept of electric cars. Consumer Reports rated it as the highest scoring car they ever tested. Tesla is coming out with a less expensive car next year, Honda is selling a plug in Accord, etc.
The only Federal money coming out now is a $7,500 tax rebate which applies to full electric or plug in vehicles. Your Prius hybrid no longer qualifies- so government incentives worked in that it made people be more accepting of electric vehicles. States can still offer incentives (I think CA offers an additional $2,500).
This year America will become the largest oil producing nation in the world. Yes, the USA. If we can keep manufacturing jobs here in the USA, differentiating ourselves with our superior product, we can keep the country strong.
More and more people are moving into cities all over the world, the smog can kill people. Every country wants better emissions. That is the future.
I got to get some sleep.