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20 of 23 people found the following review helpful
on October 30, 2012
A GOOD INTRODUCTION

I had high expectations for this book after reading most of the book. But as I got to the end, I decided I needed to scale back my expectations. Helm never really got out of the "Introduction to the Carbon Crunch" mode, though his "Introduction" is thoughtful.

HOW HELM HIT THE MARK

Helm is refreshingly critical of the cap-and-trade movement, though he never calls it that. He refers to the two ways of reducing CO2 pollution as: 1) carbon-consumption taxing (i.e., levying taxes on each product consumed based on how much carbon is consumed in the production of that product) and 2) CO2-production permitting (i.e., cap and trade). He maintains that the last twenty years of Europe's attempt at regulation of CO2 production (cap and trade) has been a dismal failure since it has simply led to exporting the carbon consumption to cheaper manufacturing countries like China. On p. 234 he says:
"Europe's carbon consumption continues to increase.... Lots of money has already been spent; much more spending has been committed to the cause; and all with no apparent impact on global emissions. ... In the hall of political mistakes, this must stand out as a pretty unique failure."

The reason for the failure is that while Europe has reduced CO2 pollution at home by reducing coal consumption in favor of natural gas, the pollution due to their consumption of artificially cheap global goods, especially from China where coal consumption has exploded, has more than offset any domestic savings.

Discussing these issues on p. 70, Helm packs quite a bit into a couple of paragraphs, so pay attention:

"Between 1990 and 2005, whilst [direct] carbon production fell by 15% [in Britain], carbon consumption went up by over 19% [in other countries that manufactured goods for Britain]. In other words, the British were causing an increase in global emissions, masked by the amount produced in Britain. It is this carbon consumption that matters in terms of global agreements and national burdens.

"Europe and the US made matters even worse from a climate change perspective by encouraging excessive consumption (and hence import demand) through the loose monetary policy after the stock market crashes in 2000. This led to rapid growth in debt-financed consumption in developed countries, notably the US and Britain, which spilled into global trade. This in turn boosted exports from China, which in turn boosted demand for oil, gas, coal, and minerals, sparking a commodities boom. The commodity boom led to a greater exploration and production in a host of resource-rich countries, including Australia, Indonesia, and Canada. These countries emissions rose as a consequence. ... The Great Recession that followed when the debt-fueled bubble burst after 2006, had its carbon impact when the US and Europe reduced demand for China's carbon-intensive exports. But its effects were short term, and within a very short period emissions growth returned. This was due to a combination of stimuli applied by many governments, the now more self-driven growth of a number of Asian and other rapidly developing countries, and domestic demand in China."

He briefly leveled his guns at the Federal Reserve Bank, the Bank of England, and both governments. He could have said much more about these four entities' stimulation of global pollution and could probably have written a whole book on that topic alone. See my "Digression on the Role of Money" at the end of this review.

HOW HELM MISSED THE MARK

--The War Economy

Having made the correct assessment that cap and trade doesn't work and raising the price of carbon via consumption taxes does, Helm then makes a tactical error. On p. 240 he says, "Less consumption means lower standards of living. ... decarbonization cannot be done with zero pain. ... Tackling climate change does mean lowering our standard of living from its current unsustainable levels."

He repeatedly compares decarbonization to a wartime economy and its pain. But wartime efforts are short and very inefficient. What we need is a shift in our consumption paradigm from global, cheap, and disposable to local, quality, and smart. That's a long-term, efficient economy-- just the opposite of wartime. Fighting a war is what government is good at since efficiency is less important and propaganda is critical. But efficiently satisfying the consumer needs of large and diverse populations is what free enterprise has shown itself to excel at. It is easy to imagine the kinds of actions and sacrifices we need to make to bring common sense and energy efficiency back to both our political and consumption decisions. The good news is that our western life style in both the US and Europe is so wasteful of energy and so rich in non-essential consumption that it would be easy for us to substantially slash our consumption with minimal pain. By the same token, our political election processes are so user friendly that it is easy for us to re-direct our governments--once we realize that no beneficial change can ever come from mainstream candidates.

We consume too much stuff because stuff is too cheap. That is an obvious economic truth along with its corollary truth--stuff is too cheap because of government subsidies. Just name a resource, and it is likely that the United States Government and/or many other governments contribute heavily to the resource's production via direct contributions of money, land, and legal rights; plus free or subsidized military protection, subsidized agriculture and drugs, market promotion, employee health care and education, R&D, transportation, environmental cleanup, assassinations, coups, loans, tax breaks, central bank manipulations, and so on. The maintenance of cheap prices of labor and mineral resources in third world countries has been the successful principle focus of American foreign policy for well over a century. For example, several economic studies have found that the real cost of oil in the US considering all subsidies at all levels of government and society is anywhere from three to six times the sticker price.

--Using the Free Market

Helm insists that taxation of the consumed carbon is the only way to bring carbon price closer to parity with carbon costs. I maintain that we should first remove as many of the government-granted subsidies as possible to see how much that achieves before we assess taxes. In addition, if we made the taxes revenue-neutral to government and cost-neutral to the consumer, the pain could be reduced even more. This can be done by offsetting some other tax in the aggregate by exactly the amount of the carbon tax revenue. Thus those consumers who reduce consumption the most will achieve more consumption savings and get just as much alternate tax relief as those who continue consumption as before. Presumably wealthy people would continue more of the old consumption habits, while lower-income consumers would opt for the savings. The free market really can be used to manage economic pain rather than simply defaulting to government coercion.

--Conservation and Standard of Living

The taxes on gasoline in Europe are about ten to twenty times what they are in the US. This has not led to a collapse of the European economy as the critics of raising gas taxes in the US have asserted would happen here. I wish Helm had covered this gas tax issue in "The Carbon Crunch" as an example of minimal pain government action. Another example of dramatic energy conservation was the California brown-outs of the early 2000s. During a three month period in 2002, Californians voluntarily reduced their electricity consumption by 20%. All I noticed were some car lots not blazing so brightly all night and many stores and homes a little warmer and dimmer than usual. I sure didn't see any pain. After the brown-out danger subsided, we quickly reverted to our cheap-energy consumption habits.

One final note on conservation and pain. I see little pain and standard-of-living decline in the following:
-Buying three pair of shoes instead of six pair each year.
-Walking the half mile to the market instead of driving.
-Not buying the stuffed toy that your grandchild will discard the next day.
-Playing tennis and softball during daylight instead of under the lights.
-Turning off the front-yard accent lights.
-Buying vegetables and meat from local or regional producers instead of from Argentina and Australia.
-Not having a perfect lawn, and sweeping dirt instead of blowing it into everyone's lungs.

THE DETAILS OF CARBON-CONSUMPTION TAXATION

--European Gasoline Tax

I wish Helm had discussed the European gasoline tax, how it is so different from that of the US, what effect it has had on gasoline consumption in Europe, and what lessons one can learn about a carbon-consumption tax. There is no international replacement for local transportation, so a gasoline tax has a strong impact on local transportation habits. But if a carbon-taxed price of a domestic shirt gets too high, a shirt imported from a country with a less-strict adherence to a carbon tax will be substituted. This does exactly what Helm criticized Europe for doing in their failed attempt at CO2-production permitting. It shifted consumption toward global goods. Helm calls this carbon leakage.

Helm also failed to discuss how the price of bunker fuel for ships and jet fuel for planes factors into the price of global commodities, and thus the over-consumption of global commodities. International common-carrier usage is probably about as sensitive to fuel price as is automobile usage. The UN says that there are 100,000 cargo boats using international waters and that their CO2 output is greater than that of the country of Germany. If we increase the price of domestic goods via a carbon-consumption tax without increasing the price of international transportation, then we will be shifting even more consumption to the global market.

In a perfect world, we could solve the whole problem by imposing some tax on the fuel at the point where it is extracted from the ground. That seems impossible since most fossil fuel is ultimately consumed in a different country from its source.

--The Helm Solution

The international taxing of anything is difficult to impossible. Thus the carbon-consumption tax would be difficult to levy on a product to product basis. It would require that we determine the CO2 content of each item in our economy, for example, a domestically made shoe versus a Chinese-made shoe. Helm admits that this is undoable, so his solution is this on p. 191:

"It turns out that a very small number of industries are responsible for the bulk of carbon imports--steel, chemicals, aluminum, cement, and fertilizers, for example. If we could find a rough and ready way of taxing these, then the problem of carbon leakage [substituting a global, high-pollution shoe for a domestic, low-pollution shoe] would be much reduced.
"The obvious way to do this is to set up some broad categories and make some assumptions."
Helm then talks in wishes and generalities until he arrives at: "Once other countries introduce a carbon price, more would probably join, since the border tax [tax imposed by the country trying to reduce carbon consumption on the basic commodities and their derivatives from other countries] undermines incentives to free-ride. Gradually an international approach could emerge. The crucial difference is not only that the carbon border tax does not need an international agreement, but also that the Europeans and others can get on with tackling climate change--for which their responsibility is far greater than the 11% of global emissions that their leaders are so keen to quote--without waiting for a possible Kyoto framework agreement that might apply from 2020."

Although this leaves me wondering whether I, like Jack, have just bought the magic bean, Helm has written some worthwhile ideas that need to be expressed and considered before we can actually take a step toward solving CO2 pollution. It is necessary to speak of wishes and generalizations before one gets serious about a solution. But I still think the book title should have been "An Introduction to the Carbon Crunch."

--The Missing Analysis

Helm needs to do some hard analysis to see just how practical his ideas are. What I have found in my career of experimental physics is that it is easy to talk yourself into how good your idea is, but when you put pencil to paper and start doing rigorous analysis with real numbers, you find the holes in your ideas. This encourages a revision of the good idea. After several such iterations, one may in fact, have a really good idea. Or one may have to go back to square one. I don't think Helm ever got to the point where his ideas could actually be claimed as good.

SHORT DIGRESSION ON THE ROLE OF MONEY (as promised above)

Excess US dollars, which fueled the consumption excess, existed because of two things: the Federal Reserve Bank and fractional reserve banking. Both of these were brought to us by the United States Government--the Fed by an act of Congress (Federal Reserve Act of 1913) and fractional reserve banking as a tradition of the Bank of England and mandated in the Federal Reserve Act. The bottom line is that the Fed, created as a creature of Government, has subsidized economic growth and corporate profits with cheap and abundant credit for a long time. In addition, federal and state governments have been the biggest long-term growth sector in the US economy, and the Fed has provided abundant funds for that also. The abundance of cheap credit reached an absurd level before the 2007 financial crisis and has even risen since then.

One corrective action that would at least shed some daylight on the presently secret acts of the Fed is an act in the US House of Representatives that simply requires that a full audit of the Fed be performed--the Federal Reserve Transparency Act (H.R. 459). A similar bill died in committee last Congress, and this new bill likely will do the same this year since mainstream Republicans and Democrats do not want to threaten the source of cheap money for their benefactors.
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9 of 10 people found the following review helpful
on November 6, 2012
This book is a valuable contribution to a small but growing movement that recognizes the failure of current energy policies and the need for an alternative that can succeed. Though not solely focused on a technology led energy policy, this new book by Dieter Helm, a respected professor of economics at Oxford University does embrace its tenets as part of a broader energy policy.

The author is committed to the urgent need to reduce CO2 but makes a damming case against the failure of current alternative energy technologies and the policies that promote them.

He favors a road-map that promotes a short term emphasis on natural gas to replace the current worldwide race for coal, along with R&D investment to develop a wide range of potentially better technologies for the future. He supports dropping all subsidies for energy deployment, both fossil and alternative energy and imposing a small but increasing carbon tax that includes border taxation to eliminate leakage. The initial tax level would be sufficient to favor natural gas over coal, and as carbon free energy alternatives become economically viable, the tax could be gradually raised to promote their acceptance.
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2 of 2 people found the following review helpful
A good critic to what has be made so far to tackling global warming. Author critics about the mainstream views about Kyoto Protocol and the role of Renewables. What I can summarize is that Renewables are not enough. Other options are needed and a big change on where the efforts are put to tackle climate change. A must-read for anyone interested in climate change and energy policy.
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1 of 1 people found the following review helpful
An up and down book with a number of "issues"

Helm grossly overstates, by implication, proven plus probable natural gas reserves. It's by implication because although has plenty of graphs and stuff elsewhere, such things are curiously missing whenever he talks gas.

He appears to deliberately get Peak Oil wrong. He again implies that King Hubbert made no allowances for offshore oil, other tech-tough oil plays, etc. Wrong. At least shallowwater offshore, and the possibility of something like "tight" onshore eventually being developed, were part of his ideas. Beyond that, he mashes up the politically driving price spikes from the two 1970s oil embargos with Peak Oil-type price climbs of the past few years. And, on the famous Paul Ehrlich-Julian Simon bet, he, like many a conservative, ignores that Ehrlich broached a follow-up bet which Simon refused.

Helm does get right the fact that the current potential of many renewables is overstated. And that carbon taxes are needed.

But, you can read about that in other climate change books.

I found this one to be pretty high on the non-credibility list because of the Peak Oil and Peak Natural Gas issues, and how Helm played with lack of jazzy graphs on both.

Up until about halfway through, I was willing to give a fourth star. After that, no. Helm simply has too much intellectual dishonesty. I can't but call it anything else; he's informed enough he could have written differently.

Until I got near the end of the book, in fact, I was ready to two-star it, and I finally did. Anybody who favorably cites Ted Nordhaus and Daniel Yergin both isn't likely to be on my good side.

Having read a book on the CIA coup against Mossadegh in 1953, I realize just how much in the tank Dan Yergin is for Western Big Oil interests, and that's part of why I moved this down from a possible third star. There are good points here, but there are liberal books that cover them. Or even centrists, like Vaclav Smil, who, surrisingly, was NOT referenced here.
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Author Helm states his reason for writing this book is because in almost a quarter of a century, virtually nothing of substance has been achieved in addressing climate change.' Meanwhile, it is hard to find any mainstream climate change expert who now believes this phenomena can be limited to 3.5 F. degrees (2 degrees Celsius). From the pre-Industrial Revolution concentration of around 275 ppm of CO2 in the atmosphere, we reached 400 ppm in May of 2013, while adding nearly 3 ppm/year - up from 2 ppm/year in 1990. Despite European commitments of 20% renewables by 2020, Germany has also closed eight nuclear reactors in 2011 following the Fukushima incident and fast-forwarded two massive new lignite coal power stations - power generation that is about as dirty as you can get. Further, Europe's emphasis on carbon production is misleading - despite carbon production falling eg. 15% from 1990-2005 in Britain, its consumption (counting production shifted to Asia) increased 19%. Another problem - advocates of current renewables often claim these sources will become cheaper than fossil fuels since prices of oil and gas will go up because we are running out of them - lately, however, fracking has added vast new gas reserves, changing politics and lowering prices to the point where that is not likely in the near future.

The world is not on track to limit average global temperature increase to 2 degrees C. Any agreement to limit global temperature increases will not emerge before 2015 and new legal obligations will not begin before 2020. The long-term average temperature increase is more likely to be between 3.6 and 5.3 degrees C (about 8 degrees F). Global CO2 emissions increased 1.4% in 2012, reaching a historic high. Non-OECD countries now account for 60% of emissions, up from 45% in 2000. China made the largest contribution to the 2012 increase, but is growth was one of the lowest it has seen in a decade, thanks to its increased deployment of renewables and improvement in energy intensity. A switch from coal to gas in power generation helped reduce U.S. emissions by 200 million metric tons, back to the level of the mid-1990s. Meanwhile, climate change has fallen down the list of voter priorities - despite advances in scientific research on the topic.

Supporters are partly responsible - many began with an all-out assault on nuclear power, an important potential solution. Some lukewarm climate change supporters (eg. Lawson and Lomborg) have found it hard to get their views out; another problem - 'Climategate' emails, though little of substance was actually there. Exceptional cold weather is met with deafening media silence, and claims about melting Himalayan glaciers turned out to have been exaggerated. Similarly, the potential real contribution (taking ecological impacts, economics and space requirements into account) of renewables are often overstated by their supporters. Meanwhile, utility bills continue to rise.

Another problem - the topic is inherently complex, far more so than doing a laboratory experiment. Increased water vapor brings a cooling effect, reduction of sea ice allows the sea to absorb and retain more heat, possibly even releasing methane hydrates - both positive feedback effects, the latter being possibly very large and disastrous. And climate has changed a lot on its own, prior to the Industrial Revolution. Computerized climate change models create substantially different outcomes for differing assumptions.

National politics present both another problem and opportunity. Northern areas like Russia may benefit from global warming (longer growing season, easier shipping and access to raw materials), while politically-connected coal producers and gas retailers, along with recent access to vast new natural gas supplies in the U.S. complicate its response - especially through the dissemination of deliberately slanted or false information.

On the other hand, Chinese citizens have become alarmed over its emissions - an estimated 25% of demonstrations are about the environment, with a heavy middle-class component (harder to put down, easier to spread). Yet, it ranks about #4 overall in polls of public concerns. More people live at sea level in China than in any other country, and its leadership knows it needs to come up with improved behavior. China now produces nearly double America's CO2; it is also the world's largest investor in green energy, spending $275 billion over five years cleaning up its air - double its defense budget. China also already has a shortage of water, and that is threatened by pollution and climate-caused glacial-melting and reduced snowfall (vs. rain). Its deserts are spreading, and crop yields plateauing - again, possibly worsened by climate change. Meanwhile, the efficiency of its coal-fired power plants rose from 31% in 2000 to 37% in 2010, vs. 33% in the U.S.

Between 2000 and 2010 global demand for coal grew over 70%, with China and India accounting for more than 90% of the growth; India and China add up to three large coal-fired new power stations/week and the two have 30 nuclear plants under construction (24 in China). There are probably several centuries of reserves left. Methane is also released as the coal seams are opened up. It also creates acid rain when burned. Aviation fuel is more damaging (2 - 4X) by being released into the atmosphere at great height; aviation passenger miles are expected to grow 4 - 6%/year, mostly in China and India.

World population is expected to grow from its current level of 7 billion to 9 - 10 billion from 1990 to 2050; it was 1.7 billion in 1900.
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2 of 3 people found the following review helpful
"Few politicians stand up and spell out that climate change is all about coal, economic growth and population growth. It is as if the three new coal power plants being opened every week in China and India don't matter, as long as we open a few wind farms in Europe and install some insulation in our houses. It would be unkind to call it a `windmills-and-draught-excluder strategy', but there is a painful grain of truth in this characterization." ---pp. 234-235

Dieter Helm is a professor of energy policy at the University of Oxford and a Fellow in Economics at New College, Oxford. The good professor is alarmed at the clear lack of progress that has been made in addressing the issue of global climate change since the Kyoto Protocol was adopted in December 1997. There are a whole host of reasons for this and certainly the energy landscape around the world has changed dramatically over the past fifteen years. Meanwhile the intense ideological battle continues between those who claim that climate change does not matter at all and others who insist that Armageddon is just around the corner. It is clear to Professor Helm that the current approach simply is not working and that a shift in strategy is now in order. Furthermore, time continues to be of the essence. His new book "The Carbon Crunch: How We're Getting Climate Change Wrong and How to Fix It" is a clarion call for good people on all sides of the political spectrum to rethink this highly radioactive issue. In "The Carbon Crunch" Helm redefines this issue while offering a number of common-sense solutions for reducing carbon emissions around the world. It was a joy to read a serious book on this topic devoid of all the usual ideological posturing. A great deal of what Helm has to say made eminent sense to me.

Make no mistake about it.....the technological issues surrounding climate change are extremely complex and the political environment continues to be an obstacle to meaningful progress. What we have learned over the past 20 years is that while renewables like wind, solar and biomass have considerable potential they are not going to solve our energy problems in the short run. Emerging economies like China and India are experiencing exponential growth rates. These so-called "economic miracles" are being fueled by an abundance of cheap labor and domestic coal supplies. The widespread use of "dirty" coal in these nations is wreaking havoc with our environment and largely offsetting the reduction of carbon production in places like Europe and the United States. The way that Helm sees it coal is the villain in this story and efforts must be made to replace coal-fired power plants with natural gas. Vast new supplies of natural gas have been discovered all over the world in the past decade and offer us an opportunity to buy some time until more progress has been made on the renewable energy front. Helm also believes that there is a possibility that a new generation of nuclear reactors could also play a significant role in reducing our carbon emissions over the next few decades. The bottom line is that we are going to have to find creative ways to reduce our carbon consumption and Helm makes no attempt to sugar-coat the issue. Sacrifices are going to be required to make it happen.

In the closing chapters of "The Carbon Crunch" Dieter Helms presents a series of thoughtful and reasonable proposals to move forward. He explains in considerable detail why in his opinion a carbon tax is the preferable approach. His logic is quite simple really--if you do not have to pay for the consequences of your carbon footprint it is unlikely that you will try to limit the damage you are causing. Helm realizes that this is going to be an extremely hard sell in these difficult economic times but firmly believes it is necessary to prevent further damage to our environment. I like to think that I have an open mind on environmental issues. I disagree with conservative commentators like Rush Limbaugh who proclaim there is no problem at all and have great disdain for "progressive" ideologues who have an agenda and try to ram rules and regulations down our throat. I commend Dieter Helm for presenting his ideas in a reasonable and scholarly manner. Over the years I have read a number of books on the issue of climate change and for my money "The Carbon Crunch: How We're Getting Climate Change Wrong and How to Fix It" is easily the best of the bunch. Very highly recommended!
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on July 23, 2013
Mr. Helm certainly knows his material. As a "green lite", I am very interested in ways of reducing the rate at which we are ruining our magnificent earth. Mr. Helm looks at the same topic, although in a very pragmatic fashion. Coal, without a doubt, is the enemy. He makes that clear in no uncertain terms. He does, however, advocate the use of natural gas as an immediate and temporary substitute for coal. My local utility has also decided to do this. He does advocate limited use of nuclear, and appears somewhat frustrated by Germany's decision to totally divest of nuclear within the decade. He points out the economic constraints currently faced by using wind and solar. I, personally, tend to see him as too bearing with these views. He also advocates carbon sequestration, which many view as just sweeping the carbon problem under the rug for future generations to deal with. China, India, South Africa and the US appear to be the biggest obstacles to surmount in getting off the coal train. He also advocates a carbon tax to more adequately represent the true costs of burning coal, oil and gas. Motor vehicles in the US are the biggest culprits in the carbon debacle. He devotes a little time to that topic, giving some time to hybrids and plug ins. Smart technology, he states, can also help us make better use of our electricity infrastructure. Pretty deep book. I learned that in spite of how well versed in this field I thought I was, I had a lot to learn. I am not in total agreement with his findings, but do respect his expertise in the field. Good book, but requires some time and thought. Not a light summer beach read.
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on May 21, 2013
Finally a book that does not look at any one place, i.e. the US, Germany, France, or only one segment within a country, such as the 'oil lobby' in the US or some other boogeyman. In fact it explains why having a single country (like Germany) impose renewable energy goals is counter productive if at the same time the country shifts manufacturing to carbon-intensive China. The discussion of environmental summitry is also interesting and points out obvious problems with Kyoto and European carbon trading market. The proposed solutions are worth examination and include a feedback mechanism to set prices without excess volatility. Good read.
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on April 16, 2013
This is one of the best books I've so far read on this subject. Read it on my kindle, my mobile.. I do recommend to every one, greenpeace people included, with interest on this. Very well wriitten and full of (good) technical data.
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1 of 2 people found the following review helpful
on March 16, 2013
As clearly pointed out in the excellent review of Bryony Worthington [..] , the book offers few new insights that can be practically acted upon, and fails to mention the real blockers of progress - the fossil fuel lobby which is not even discussed.

Instead, the lack of progress is laid at the feet of the people who have done the most to raise the profile of climate change and demand urgent action.

The reader interested in facts rather than propaganda will be well-advised to consult Clean Break: The Story of Germany's Energy Transformation and What Americans Can Learn from It (Kindle Single) rather than a superficial book like this.
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