However, policy makers should avoid creating an expectation that any existing plant will be protected from future losses arising from changes in environmental regulation. Such assurances would create a situation of moral hazard in which companies could continue to build plant that performs poorly in environmental terms, undermining the expectations of the rest of the market, and hampering efforts to enforce changes in the capital stock. The incentive to exploit this resource depends on the profit, based on the difference between market value and cost of production.