A Road to Hell? Climate Change and Public Deficit

Salvador Dali, Climate change, Hobbesian World, Civil WarThe existence of climate change is now recognized as a fact, besides a few remaining climate-sceptics. Its impact is, however, very far from being systematically included in analyses, as should be done and as will be, hopefully, increasingly the norm.

A large part of the efforts related to climate change are focused on scenarios dealing with the long-term future – the end of the century – and this crucial multi-disciplinary endeavour must continue or even be reinforced. This should not, however, dispense us with looking too at the short to medium term (up to ten years) future, as climate change and its impacts are not only something that our children, grand children, and great grand children will know, but a change of context that has already started. Furthermore, those short to medium term direct and indirect impacts and the way they are faced, are most likely to have a crucial impact on our future long-term understanding and capabilities. Here, I would like to focus on the potential impacts of rising natural catastrophes on the state (government in American terms) and possible consequences.

A rising number of natural catastrophes and overall losses worldwide

To be able to start considering such impacts, one must break at least two other biases. The first is inherited from the post World War II “self-determination” period, and can be caricatured as the belief that only poorer and developing countries will suffer from climate change; the main problems are first that rich countries should pay for the huge losses that poorer countries will incur, second that they should also pay for those countries that are getting rich quickly (e.g. China and India), because “the first world” polluted in the past to become rich. The second bias is that only rare, large, noticeable events matter and will impact us. Such events, e.g. Sandy, do definitely count, and furthermore may serve to raise awareness, especially when they hit a well-mediatized country, both in terms of classical media and world-wide-web coverage, such as the United States. They are, nonetheless, not the only ones, and all events must be considered (ideally, loss of biodiversity and of “ecosystem services” should also be included).

The data held and publicised by re-insurance companies are currently one of the best entry point for estimations of the past existence and costs of climate change related events. Munich-Re, notably, has “one of the world‘s largest databases on natural catastrophes” (Munich-Re, 2013: 3) and publishes regularly analyses related to natural catastrophes. If we wanted to focus solely on climate change, then geophysical events (earthquakes, volcanoes, tsunamis) should be left aside. However, the latter risks  are also part of the slowly evolving conditions with which a society must deal in terms of security, notably in the Ring of Fire considering plate tectonics, as the Tōhoku earthquake and tsunami on 11 March 2011 in Japan reminded us. They should thus be kept.

In terms of geographical localization, the three world maps of natural catastrophes for 2010, 2011 and 2012 below (download from Munich-Re for full size pdf), show that, obviously, the whole world is impacted.

2012_mrnatcatservice_natural_disasters2012_worldmap_en

2011_mrnatcatservice_natural_disasters2011_worldmap_touch_en

2010_mrnatcatservice_natural_disasters2010_worldmap_touch_en

The breakdown by continent of all natural catastrophes between 1980 and 2012 (Munich-Re, Topics Geo 2012, 2013, pp. 54-55), in terms of number of events, fatalities and overall losses is even more telling. Monetary losses are much higher in the so-called developed world, while fatalities dramatically rise in poorer countries. Neither one nor the other is a cause for rejoicing, and the first may have bearings on the second.

1980-2012 Natural Catastrophes, fatalities, overall losses, number of events

The world also knows increasingly more natural catastrophes (note the longer series for the U.S., starting in 1950), as shown by the figures below, and more costly ones, the United States bearing the brunt of insured losses (Munich-Re, 2012 NatCat Year in Review).

blobal trends events 1980 2012

number US 1950 2011

global trends cost 1980 2012

A cost to states and governments: increased fiscal exposure

Those events have obviously a direct cost to states, as underlined in the 2013 High Risk Report of the U.S. Government Accountability Office (when this cost is usually ever hardly mentioned notably in discussions on public deficit, austerity and budgets):

 “These impacts [climate change] will result in increased fiscal exposure for the federal government in many areas, including, but not limited to its role as (1) the owner or operator of extensive infrastructure such as defence facilities and federal property vulnerable to climate impacts, (2) the insurer of property and crops vulnerable to climate impacts, (3) the provider of data and technical assistance to state and local governments responsible for managing the impacts of climate change on their activities, and (4) the provider of aid in response to disasters. For example, disaster declarations have increased over recent decades, and the Federal Emergency Management Agency (FEMA) has obligated over $80 billion in federal assistance for disasters declared during fiscal years 2004 through 2011.[3] In addition, on December 7, 2012, the Office of Management and Budget (OMB) within the Executive Office of the President requested $60.4 billion in federal resources for Superstorm Sandy recovery efforts to “build a more resilient Nation prepared to face both current and future challenges, including a changing climate.”

For 2012, for the U.S., Munich-Re estimates the overall (direct?) loss to US$101,13 billion, which represents 9,28% of the public deficit (US$1.089 billion). By comparison, the Watson Institute in the Costs of War project estimated the overall cost of the war in Iraq, for the U.S., at US$2,2 trillion. This would correspond to approximately US$251,43 billion per year (total cost incurred between 20 March 2003 and December 2011, i.e. 105 months). Thus, for the U.S., the estimated 2012 direct costs of natural catastrophes represent 40,22% of the estimated yearly cost of the war in Iraq. One of the major differences between both is that losses stemming from natural catastrophes will not stop but rather increase.

We must also not forget indirect costs to states in terms of loss of revenues: each catastrophe has an economic impact on all actors, from individuals to companies (as well as probably health related cost for people), which will then be translated into fewer taxes thus income for the state.

This is not only true – adapted to each state’s specificities – for all countries, but the “increased fiscal exposure” is most likely to have been going on from at least the early 1990s, if we consider Munich-Re charts. Specific research should be made to gather  clearer and better knowledge. The share those supplementary costs have in so many countries’ public deficit should thus be estimated and considered.

For the future, as underlined by the U.S. G.A.O. 2013 High Risk Report, we should also add to those accumulated losses the cost of adaptive measures to climate change, expensive but necessary and cheaper than inaction (e.g. upgrading or changing infrastructures: adapting bridges, roads, buildings etc.) and of mitigating ones (carbon capture storage, changing energy mix, and all the devices we shall need to create and use).

A road to hell?

Thus, we have rising costs linked to dangers that cannot be avoided anymore. Meanwhile, policies aim at reducing state expenditures to struggle against increasing public deficit, when facing natural catastrophes obviously means rising public expenses.

In the meantime, those very dangers are most probably lowering incomes, which may only contribute to deepen the overall public deficit. This, in turn, if we remain in the same policy framework, which, among others, fails to consider fully climate change and other natural disasters, will lead to further reduction of state expenditures.

The most likely consequences, if we stay on this trajectory, are that states or governments will be increasingly unable to ensure the security of their citizens, with impact in terms of legitimacy, which, in turn, may only lead to social disorders. As a result, fatalities and casualties may only rise worldwide in all countries from unhindered impacts of disasters, civil unrest, rising criminality and reduction of aid and cooperation. We would thus be heading for a Hobbesian pre-Leviathan world, but in a harsher natural environment.

Privatization and outsourcing may not be the universal panacea, in the absence of a strong state, as respected and upheld regulatory frameworks are necessary (OECD, 2011: 18) and as impoverished people hit by multiple disasters may not be the best clients to earn profits.

Human societies may not have had to face anthropogenic environmental changes in the past, but, throughout history, they did successfully rise above the challenges of increasing costs of governance because of novel dangers. Everything being equal, these past periods could provide us with ideas regarding the solutions that must be imagined and then implemented.

Short of falling into extremely predatory authoritarian systems, where a few may survive on the despair of the many – and I recommend reading Suzanne Collins’ truly excellent novel The Hungers’ Games as  an example of one of the many faces such a system could take – solutions must involve new income for political authorities to allow them ensuring security, which will most probably lead to the creation of new socio-political models of organization. In a world that seems to have lost its hope, its enthusiasm and its bearings, such a mammoth challenge could be construed as an immense rallying and mobilizing project, for those leaders with a vision.

—————

Special thanks to Dr Jean-Michel Valantin, specialised in environmental security and author of the recent Guerre et Nature (War and Nature) for many exciting discussions and for helping me overcoming information overload and finding back U.S. G.A.O. 2013 High Risk Report. 

Della Croce, R., C. Kaminker and F. Stewart (2011), “The Role of Pension Funds in Financing Green Growth Initiatives”, OECD Working Papers on Finance, Insurance and Private Pensions,  No. 10, OECD Publishing. http://dx.doi.org/10.1787/5kg58j1lwdjd-en

Munich-Re, 2012 NATURAL CATASTROPHE YEAR IN REVIEW, January 3, 2013.

The Red (team) Analysis Weekly No91, 14 March 2013

The Actors and the System: Powerlessness? If we were to estimate the power of the actors by their ability to stabilize the system, they would not fare very well, and this, in itself, is a signal that tensions will most probably continue to rise and escalate in intensity, as well as widen in scope. One of the interesting question would thus be: How long can this system withstand the pressure until it breaks?

Click on image to read on Paper.li.

National Security, Horizon Scanning, Warning, War, escalation

Puzzle: Strange Parallels in Global Trends 2030

Global Trends 2030 is the 5th edition of the foresight document the U.S. National Intelligence Council prepares every four years and publicly publishes just after the  presidential election. It aims at being  “a forward-looking document to aid policymakers in their long-term planning on key issues of worldwide importance.” In the words of Chris Kojm, current chairman of the NIC, it is “a framework for thinking about the future.”

puzzle, Global Trends 2030The Global Trends (GT) series is an important read for those interested in the U.S., in international relations, national security, foreign policy and politics, in the future, as well as in strategic foresight methodology (this last edition is notably exemplary in the way it developed a real strategy of delivery). Considering the quality of the content, I was  particularly intrigued by a strange parallel made in the chapter on the role of the United States as game-changer, and deemed important enough to be used almost verbatim in the executive summary to introduce the “alternative worlds”, ie. the four fictionalised scenarios resulting from the study:

“The present recalls past transition points—such as 1815, 1919, 1945, and 1989—when the path forward was not clear-cut and the world faced the possibility of different global futures. We have more than enough information to suggest that however rapid change has been over the past couple decades, the rate of change will accelerate in the future.” (Executive summary, p.xii)

“The present recalls past transition points—such as 1815, 1919, or 1945—when the path forward was not clear-cut and the world faced the possibility
 of different global futures. In all those cases, the transition was extended and re-balancing was partly a matter of trial and error.” (p.105)

Those dates mark the end of wars but, unless we are not living in the same world, 2012/13 ends no war. Comparisons or analogies are never gratuitous and always mean something, would it be only to help the reader understand better the writer’s thoughts. We are thus faced with a puzzle, what did the authors of GT had in mind, and what could it mean, more generally, for our understanding of the world and its future?

1815, 1919, 1945 and 1989: war and new order

Why were those four specific dates chosen? GT 2030 explains those dates were chosen for what they heralded: a new area, a novel world order with a reconfiguration of power. The box p.106 titled “World rebalanced—Parallels with the Past?” and that focuses on the 19th century “long peace” starting in 1815, confirms this perspective. However, the author of this comparison also underlines that, in 1815, the great powers were “coming out of over 25 years of conflict”.

The four years chosen thus do also obviously correspond to the end of systemic or global war periods.

In a nutshell, 1815 marks the end of the French Revolution and of the corresponding wars, including the Napoleonic ones, when the new France defended its novel system against the interests of the old privileged monarchic system, as shown by Fred Halliday in the development of the concept of homogeneity (1994: 94-123). Using Burke, Halliday underlines that “The stability of other societies in Europe required that France too be liked them. Without homogeneity, there could be neither internal nor international peace… For what he [Burke] is arguing is that relations between states rest above all not on the conduct of foreign policy in the narrow sense, but on convergence and similitude in domestic arrangements, in other words on the prevalence of a homogeneous international society” (pp.107-112). Needless to say, the new ideas and system promoted by the French revolutionary ideals lost, to a Bourbon restoration in France and the continuity of privileges in Europe. It also ushered the period of the long European peace heralded by the Congress of Vienna – as GT 2030 emphasises – which lasted until 1870 when Prussia invaded and defeated France. This peace was mainly European, as China, notably, was opened to foreign powers during the 1839 Opium War, the 1839 Chinese defeat and the 1842 treaty of Nanking (Nanjing). The international system was being redrawn.

1919 marks the end of World War I, with its 16 million deaths and 20 million wounded (civilian and armed forces). It also directly prepared World War II, notably through the mammoth reparations demanded from Germany with the Treaty of Versailles. If World War I heralded the end of an order or failed to do so thus paving the way for World War II can be debated. Most importantly, the First World War was marked by the Russian Revolution of 1917 and the birth of the Soviet Union.

WWII alliances, Global Trends 20301945 corresponds to the end of World War II, the “deadliest conflict in history” (60 million death), the fight to death between the Axis Power (Germany, Italy, Japan but also Thailand, Finland, Hungary, Romania, Iraq, etc. and the Allied Powers (see map). 1945 heralded too a world as divided at the Yalta conference and that was to give the bipolar order of the Cold War. Meanwhile, the fear of the spread of Communist ideals and power was instrumental in making the 1947 Marshall Plan possible, and in changing the balance of power between Western classes. The privileged elite, faced with the memory of the Great Depression and of the war and now the fear of Communism, gave much to the working and middle class. A new chapter of history indeed started with the expansion of the Middle Class during the post-war boom.

1989 marks the end of the Cold War, the demise of the Soviet Union and of Communism. The Cold War was not as bloodless as could be believed, considering all the proxy wars that were fought and the casualties they implied (see UCDP/PRIO Armed Conflict Dataset and an interesting synthesis by Filip Spagnoli, “Statistics on Violent Conflict”). It ushered the belief in the end of history (Fukuyama, The End of History and the Last Man) and of the inevitable, inexorable but fundamentally good globalization, the era of Davos, and of a gradually unchecked and “dislocating” capitalism, as pointed out by the Henry Jackson Initiative in its project ‘Towards a More Inclusive Capitalism.’

What if 2012/2013 were also perceived as the end of a war?

If we now come back to our 2013 world, it is obvious that the last 5 to 10 years have not seen such global lethal wars as those we briefly reviewed. Those wars are also so famous it is impossible that the scholars having researched and written the report ignore them, and overlook the instrumental role they played in the birth of a new world order, the element they want to stress.

The first (and less interesting) possibility that could explain our puzzle is that the comparison used (the dates chosen) to find a meaning to the current transition is unjustified and is linked to one or many biases. For example, the fear of a new global war could be at work. Such bias could also be seen in the asserted but debatable belief that, despite rising odds of interstate conflicts, world wars are now impossible. This fear, and the implausibility of global wars are exemplified in the introduction to GT 2030 first scenario, “stalled engines”:

“Arguably, darker scenarios are imaginable, including a complete breakdown and reversal of globalization due potentially to a large-scale conflict on the order of a World War I or World War II, but such outcomes do not seem probable.” (p.xii)

Yet, one finds instances of similar fears but with different comparisons and conclusions, the current period being compared with 1913, as in the opening sentences of the second scenario of GT 2030, or with the 1929 crisis.

GT 2030 could also be a victim of the current trend towards a lack of  historical depth – and daring to go as far back as 1815 is in itself a feat that deserves to be applauded. Yet, this may be insufficient and we may have to go even further back in history to find more adequate model, as suggested here. Our transition could be much deeper and larger than the one envisioned in GT 2030. However, then, could the authors truly write it? Would such thoughts meet the criteria of timeliness? Would references to even older times be considered or just dismissed as irrelevant because too ancient?

Another possibility to explain this strange choice is that, unconsciously or implicitly, 2012/2013 is really seen as the end of a period akin to a war.

The only instances that spring to mind are the War on Terror starting with 9/11 and that would then be over, or the financial and economic crisis starting with the subprime crisis in the U.S. in 2007 that would also have been overcome.

Considering the current war in Syria and the evolution of the situation there, the spread of Al Qaeda despite the death of Bin Laden, the uncertainties regarding the situations in Egypt, Libya and Tunisia among others, the tension with Iran, as well as the perspective found in GT 2030 on terrorism (pp. 52, 60, 68*, 103 etc.) or interstate war (pp. 61-68), it seems unlikely that the authors referred to the end of the War on Terror.

Thus remains only the global crisis.

Assuming this is correct, what would that mean? However serious and dangerous the financial crisis has been so far, it certainly should not compare with the scope of destructions of war, except in a world that would principally and foremost be defined in economic terms.

This would emphasize how much our present values material goods over life, which indeed tends to correspond to the modernizing materialist paradigm.

PIGS, RUPIIGS, 2010, Global Trends 2030This could also signify the relief that comes after tension, as harsh austerity measures have been finally imposed without leading to any serious social uprising besides protests (and there we should exercise great caution as the relief may be linked to our improper knowledge of dynamics and processes of revolts in our current world, as well as by the difficulty to think the time of political process, which is long.)

This could imply that the world of now entrenched and still rising inequalities, where the Western working class and middle class – to say nothing of the poor – are to be sacrificed on the altar of global profits and global growth (before Asians, for example, know the same fate), is not a transition period that will end but the start of a new order. This would thus made the third fictionalized narrative of GT 2030, “Gini Out-of-the-Bottle” the most likely scenario.

The real reason for the use of these strange parallels is probably a mix of all the above. It can be seen as exemplifying the various and conflicting beliefs and fears with which our transition era has to contend. Only by wondering and unpacking those puzzles shall we be able to make those beliefs conscious and, in the best of case, rise above them to create a better world for all… assuming this is not an old, past, out-of-fashion ideal.

*GT2030 envisions that “the recent religious wave is receding and could end by 2030” (p.68). This implies that it has not happened yet.

The Shale Oil and Gas Security Sigils

The aim of the Shale Oil and Gas Security Sigils is to be a daily scan focusing on security related to shale oil and gas.

We are currently investigating new AI ways to deliver an even better East Seas Security Sigils. The original complimentary version ran from May 2012 to April 2023.


Although technological experimentations to extract shale gas and oil started in the 19th century, it is only in the 1980s and 1990s they started being commercially exploited on a relatively large-scale in the U.S., and in 2005 that production truly meaningfully took off, first  in the Barnett Shale with shale gas (EIA, 2011). Since then, production of both shale oil and shale gas is seen as a game-changer, already operative in the U.S., potential in those countries with reserves. Shale fuels remain controversial, notably considering the various environmental risks, the social opposition and distrust, the uncertainty regarding recoverable reserves, the evolution of technology and regulations, and the opposite interests of different actors.

shale oil, shale gas, fracking, peak oil

The rising concern about shale fuels and the way they are produced, “fracking” (properly “hydraulic fracturing”, the technology used to recover shale gas and oil) is perfectly exemplified by the results obtained in volume with Google search for the years 2004, 2008 and 2012. The Google Trends curves below (representing percentages, not quantities) also underline concern about fracking. There, however, interest in shale gas increases more than concern for shale oil (also probably because “shale gas” tends to cover all shale related fuels) while peak oil becomes less trendy. This also reminds us that information and analysis are and will be one of the arena where the power struggles for or against shale fuels takes place.

shale oil, shale gas, fracking, peak oil

Considering the crucial importance of energy for our civilization and its impact on the environment (this needs to be reminded as the curves below would be dwarfed by other search terms like “baseball,” “football,” or “Oscars”), it is necessary to keep abreast of developments in this area to be able to anticipate potential evolutions in this fluid and volatile context, as well as to read documents from all sources if one wants to obtain, in fine, as objective as possible a judgement on the future.

The Sigils are a series of scans exploring the horizon for weak signals related to various issues relevant to the security of societies, polities, nations and citizens.


EIA, Review of Emerging Resources: U.S. Shale Gas and Shale Oil Plays, 2011.

Featured image: Cozy Dell Formation — Giant shale rip-up clast at the base of a high-density turbidite. In the Topatopa Mountains, Ventura County, Southern California.By Mikesclark (Own work) [CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0)], via Wikimedia Commons

Beyond Fear of Near-Earth Objects: Mining Resources from Space?

In February 2013, the fall of a meteor in Russia’s Urals (e.g. “Meteorite hits Russian Urals: Fireball explosion wreaks havoc, up to 1,200 injured“, RT, 15 Feb 2013), added to the close fly-by of Asteroid 2012 DA14, and to reports of a meteorite sighted over Cuba, reignited a renewed interest for near-earth objects (NEOs), notably because of the threat they may constitute to the earth and its inhabitants. Yet, NEOs are not only about dangers and Armageddon scenarios, they may also well be an opportunity.  The possibility to use resources from space also exists and may be seen as a major wild card, which could completely upset most scenarios on resources and energy issues, thus constituting a “grey swan,” to use Taleb’s terminology. From dream …

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The Space Resources and Security Sigils

The aim of the Space Resources and Security Sigils is to be a daily scan focusing on space and international security.

We are currently investigating new AI ways to deliver an even better Space Resources and Security Sigils. The original complimentary version ran from May 2012 to April 2023.

An opening article on the importance of space resources as their use should be a reality some time into the future (end of the 2020s? 2030s?) can be found here.

The Sigils are a series of scans exploring the horizon for weak signals related to various issues relevant to the security of societies, polities, nations and citizens.

Featured image: An asteroid mining mission to an Earth-approaching asteroid by Denise Watt, NASA, public domain via Wikimedia Commons

Extreme Environments Security

extreme environments

In its Global Strategic Trends – Out to 2040, the UK Ministry of Defence, Development, Concepts and Doctrine Centre (DCDC), underlined that “resource and the environment” was one of the major dimensions shaping the future. Notably, the highly likely growing resource scarcity would lead to strengthened interest in what they call “Extreme Environments” – i.e. the deep sea, space, the Arctic, Antarctica and the deep underground – and in their exploitation.

“The search for alternative sources of energy, minerals, food and water, enabled by the assured transfer and access to information, will become more urgent. Consequently the exploration of extreme environments such as: space; the Polar regions; the deep ocean; and deep underground regions is likely to increase.” p.115 Global Strategic Trends – Out to 2040

Here we shall progressively explore the future security components of those extreme environments, understand what they entail, how they could interact with and modify other issues and the futures we foresee, as well as impact actors, as both opportunities and threats. Regular scans on specific issues are mentioned in the related sections below.

Deep-sea resources security

Space resources

The Arctic region

See all Arctic related in-depth articles.

Antarctica

See all Antarctica related articles

Deep underground

None


The picture was made out of the following images:

  • An asteroid mining mission to an Earth-approaching asteroid by Denise Watt, NASA, public domain via Wikimedia Commons.
  • Earth seafloor crust age 1996 by NOAA, http://www.ngdc.noaa.gov, Public domain, via Wikimedia Commons.
  • Nuclear icebreaker “Yamal” on its way to the North Pole By Wofratz (Own work) [CC-BY-SA-2.5 (http://creativecommons.org/licenses/by-sa/2.5)], via Wikimedia Commons.
  • Map of Antarctica from en:Image:Antarctica.jpg – Political map and research stations (2002) – CIA – Public domain.
  • Blender3D_EarthQuarterCut.jpg by SoylentGreen, Earth-Texture is from NASA) [GFDL (http://www.gnu.org/copyleft/fdl.html) or CC-BY-SA-3.0 (http://creativecommons.org/licenses/by-sa/3.0/)], via Wikimedia Commons.

 

Assessing End of Year Predictions: How Did they Fare? (2)

The evaluation of our 2012 predictions’ sample underlines notably a widespread conventional view of national security, novel issues being ignored; a relative inability to assess timing whilst our understanding of issues fares relatively well; the existence of major biases, notably regarding China, Russia, and the U.S; the difficulty of prediction for novel issues and old issues in new context.

The remaining part of this article is for our members and those who purchased special access plans. Make sure you get real analysis and not opinion, or, worse, fake news. Log in and access this article.

An Experiment in Assessing End of Year Predictions (1)

This post will present the experiment – assessing a sample of open source predictions for the year 2012 – address the methodological problems encountered while creating the evaluation itself, and underline the lessons learned. The second part (forthcoming) will discuss results.

The remaining part of this article is for our members and those who purchased special access plans. Make sure you get real analysis and not opinion, or, worse, fake news. Log in and access this article.

Useful Rules for Strategic Foresight and Risk Management from Taleb’s The Black Swan

This second article on The Black Swan: the impact of the highly improbable by Nassim Nicholas Taleb emphasises some of the author’s points that are crucial for foresight and warning. Likewise, they are necessary for any work dealing with the future and its anticipation, from risk management to horizon scanning through early warning. The methodology of SF&W and risk management allows addressing these points. They should become rules and principles all analysts follow. Indeed, without paying attention to them, good analysis is impossible. The first article on The Black Swan can be accessed here.Humility(Notably pp.190-200) Considering uncertainty, but also our imperfect condition of human beings, the complexity of the social world, feedbacks, our more than insufficient knowledge and understanding, we must …

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