Incentive to spend the money on the R&D. But suppose the firm is now faced with having to meet emission standards of e2 tons/year. With the original marginal abatement costs the total annual cost of compliance for this firm is (a+b) per year. If the R&D program is successful, compliance cost would be only b/year. The difference, a/year, is the amount by which compliance cost would be reduced and represents, in fact, the incentive for engaging in the R&D effort. We will see in the next chapter that this is a weaker effect than is provided by economic-incentive types of programs. Nevertheless, it is an incentive, which is more than we could say for technology standards.