In order to promote high-quality development, the governance mechanism for green technology innovation is undergoing an expansion from restrictive governance of environmental regulations to market-oriented incentive governance. This essay adopts the error correction model to investigate the driving effect of environmental regulation and market-oriented incentive mechanism on green technology innovation. The results show that there are impacts of both long-term equilibrium and short-term fluctuation when it comes to the influence of environmental regulation on green technology innovation. The long-term equilibrium impact presents a first-inhibited-then-promoted "U"-shaped relationship while the short-term fluctuation impact, on the contrary, shows an inverted "U"-shaped relationship, suggesting a first-promoted-and-then-inhibited trend. The market-oriented incentives have a positive effect on green technology innovation. Furthermore, the higher the market-oriented incentive intensity is, the weaker the sensitivity of green technology innovation to environmental regulation will be.