The problem with a negative incentive is that saying "don't do X" doesn't mean "actually do intended alternative Y instead."
Example: Volkswagen faking emissions tests.
And at least if someone cheats their way to a subsidy a government will probably have an easier time pursuing a case for fraud than they would for tax evasion or whatever.
The example I gave is entirely legal as far as I understand, that was my point: there are gaint gaping holes in the regulations to exploit for people who don't actually care about the environment and only wish to maximize their profits.
