I don't know specifics. I do recall from many years past, some cities failing EPA air quality standards, but I cannot recall if they were fined. Yeah, that may not square with a private business doing the polluting and not the city. I'll probably remember one of the cities about three days from now.

Here's an article on tighter standards, but mentions zero about consequences if standards are not met:

https://apnews.com/article/wildfires...9b35a260ade6fe

So yes, in order for there to be financial incentives to encourage bike commuting, there needs to be financial costs to the polluting that are great enough to encourage biking, and the biking needs to be able to make a difference.