0 Now let's compare the outcomes under each policy if the regulator knows the true MD curve but is uncertain about the MAC curve MACE is the MAC curve estimated by the regulator MACT is the true MAC curve which is not observed $ E' E E" emissions 9 Comparing the outcome under each policy standard: regulator sets standard at E', which generates a social loss of A tax: regulator sets tax to t'; rm reSponds by choosing emission level E\