More than fifteen years after signing the Rio Declaration on Environment and Development and nearly a decade after its signing of the Kyoto Protocol, the U.S. federal government has maintained its posture of disengagement from climate policy. Congress rejected a series of legislative proposals in 2005 that would have established modest targets for containing the growth of greenhouse gas emissions from major sources. Even Congressional passage of one of these bills would likely have been blocked by a presidential veto. At about the same time, President George Bush rejected strong pressures to accept some new greenhouse gas initiatives as the G-8 group of developed nations gave new attention to climate change.
This familiar tale, however, fails to provide a complete picture of the evolving U.S. engagement in climate policy. Indeed, at the very time federal institutions continued to thrash about on this issue, major new initiatives were launched, with bipartisan support, in such diverse state capitals as Sacramento (Calif.), Carson City (Nev.), Santa Fe (N.M.), Austin (Tex.), Harrisburg (Penn.), Albany (N.Y.), and Hartford (Conn.). By the middle of the current decade, more than half of the U.S. states could be fairly characterized as actively involved in climate change policy, with one or more policies that promised to significantly reduce their greenhouse gas emissions. Virtually all states were beginning to at least study the issue and explore very modest remedies. A growing number of these—such as California, Connecticut, New Jersey, and New York—were every bit as engaged on multiple policy fronts as counterparts in European capitals and far more active than all Canadian provinces except Manitoba. These programs are beginning to have some effect on stabilizing emissions from their jurisdictions. Indeed, many states are major sources of greenhouse gas emissions, and thus state programs offer considerable potential for reducing emissions. If the fifty states were to secede and become sovereign nations, thirteen would rank among the world’s top forty nations in emissions, led by Texas in seventh place ahead of the United Kingdom.
There are, of course, profound limitations on what states, acting individually or collectively, can do to reverse the steady growth of American greenhouse gas releases of recent decades. States face enormous constitutional constraints, including prohibitions against the negotiation of international treaties and restrictions on commercial transactions that cross state boundaries. This article will consider the historic role of U.S. states in national policy development and particular drivers that seem pivotal in the case of climate change. It will also examine the evolution of state climate policy, with particular attention to new trends that have emerged in the past few years. Finally, we will consider possible limitations facing state-driven policy and opportunities for these state-level developments to continue to expand and ultimately define a unique U.S. response to this enormous policy challenge.
Many accounts of U.S. public policy are written as if the United States operated as a unitary system, whereby all innovations and initiatives emanate from the federal government. A more nuanced view of U.S. federalism indicates that states have often served a far more expansive and visionary role. The potential for early and active state engagement on policy issues has intensified in recent decades, as the capacity of most state governments has grown markedly. This has led in many instances to dramatic increases in state revenue and expansion of state agencies with considerable oversight in all areas relevant to greenhouse gases, including environmental protection, energy, transportation, and natural resources. Even in areas with significant federal policy oversight, states have become increasingly active and, in some cases, fairly autonomous in interpretation, implementation, and innovation.
Extending such resources and powers into the realm of climate change is a fairly incremental step in some instances, such as electricity regulation, where state governments have been dominant for decades. But the burgeoning state role must be seen as not merely an extension of existing authority but rather a new movement of sorts driven by a set of factors distinct to the issue of climate change. These factors have proven increasingly influential in a wide range of jurisdictions, overcoming inherent opposition and building generally broad and bipartisan coalitions for action. In some jurisdictions, this dynamic has advanced so far that one of the greatest conflicts in climate policy innovation is determining which political leaders get to “claim credit” for taking early steps. The following factors appear to be pivotal drivers behind action in numerous states.
Contrary to the rather acrimonious interpretations of climate science in national policy circles, individual states have begun to feel the impact of climate change in more immediate ways. These impacts differ by jurisdiction but are often buttressed by state-based researchers working cooperatively with state regulatory agencies in attempting to discern localized indicators of climate impact. Among coastal states, for example, concern is often concentrated on the impact of rising sea level, particularly given the substantial economic development along many shores at relatively low sea level in the United States. This dynamic has influenced state governments from Honolulu (Hawaii) to Trenton (N.J.). No two states have faced identical experiences, but a common theme suggests that individual states and regions have begun to face direct impacts, thereby taking the climate change policy debate from an acrimonious battle over graphs and charts toward something that touches real life experience and legitimizes a policy response.
Virtually all states that have responded to the challenge of climate change have done so through methods that they deem likely to reduce greenhouse gas emissions and simultaneously foster economic development. Active state promotion of renewable energy, through a combination of mandates and financial incentive programs, has focused upon development of “home grown” sources of electricity that promise to both stabilize local energy supply and promote significant new job opportunities for state residents. Many states with active economic development programs have concluded that investment in the technologies and skills needed in a less-carbonized society in coming decades is a sound bet. In response, they have advanced many policy initiatives in large part in anticipation of economic benefits. Even some states with substantial sectors that generate massive amounts of greenhouse gases, such as coal-intensive Pennsylvania, have begun to shift their thinking toward the opportunities for longer-term economic development presented by investment in renewable energy.
Many states worked intensively in recent decades to build in-house capacity on the environment, energy, and other areas that now have direct relevance to climate change. Consequently, state agencies have proven increasingly fertile areas for “policy entrepreneurs” to develop ideas that are tailored to their state’s needs and opportunities. These ideas can then be translated into legislation, executive orders, and pilot programs. State officials also have proven effective in forming coalitions, often cutting across partisan lines in the legislature and engaging supportive interest groups where feasible. No two states have assembled identical climate policy constituencies, nor have any devised identical policies. But state agencies have been significant drivers behind innovation, whether in the stages of developing policy ideas or seeing them through to policy formation. In more recent years, state-based environmental advocacy groups and private firms that might benefit financially from climate policy have become increasingly visible and active in bringing about far-reaching initiatives. This has created broader supportive coalitions for new policy development, although some schisms have begun to emerge, such as between competing providers of renewable energy.
Entering the Second Generation of State Climate Policies
The sheer volume and variety of state climate initiatives is staggering, hard to measure with precision, and subject to expansion. Much policy analysis has been so heavily focused on federal or international-level actions that state or other sub-national policies have received markedly less attention. This article draws from ongoing refinement of climate policy profiles for all 50 states, representing a confluence of interviews, government documents and reports, and legislative histories, as well as sector-specific data acquired from state-based professional associations. These sources help distill current developments and highlight emerging trends in a “second generation” of state climate policy.
Perhaps the most evident trend in state policy engagement on climate change is that the number of states involved as well as aggregate number and range of policies continues to expand on a monthly basis. As of mid-2006, this trend showed no signs of slowing; it may in fact be accelerating. More than half of the states have enacted at least one piece of climate legislation or passed at least one executive order that sets formal requirements for reducing greenhouse gases; 18 states have passed multiple laws designed to achieve such reductions. Forty-seven have completed greenhouse gas inventories and 22 have set forth “action plans” to guide future policy. In six cases, states have formally established statewide commitments to reduce production of greenhouse gases over future years and decades, linked to policies designed to attain these reduction pledges. Renewable energy, discussed further below, has been a particularly popular area of engagement, with 22 states enacting so-called “renewable portfolio standards” (RPS) that mandate a formal increase in the amount of electricity distributed in a state that must be generated from renewable sources. Fifteen states have established their own version of carbon taxes, through so-called “social benefit charges” that allocate their revenues to renewable energy development or energy efficiency projects. In transportation, 10 states have agreed to follow California in establishing the world’s first carbon dioxide emissions standards for vehicles and 12 states are engaged in some form of capping carbon emissions from electrical utilities.
Alongside the sheer magnitude of state policies, these efforts are generally becoming more rigorous in terms of the levels of emission reductions that they are seeking. There has been a gradual shift in state policy over the past decade, with voluntary initiatives increasingly supplanted with regulatory efforts. Most of these policies retain considerable flexibility in terms of compliance, consistent with the credit-trading mechanisms popular among most nations that have ratified Kyoto. But their rigor is steadily increasing, along with the likely impact on greenhouse gases if faithfully implemented. In turn, states continue to have multiple motivations for pursuing these respective policies but are becoming increasingly explicit and forceful in articulating the climate benefits, among others. This runs somewhat contrary to earlier practice, whereby many states were aware of potential climate impact but said little if anything about this element of a proposed policy. This newer pattern is particularly evident among current and recent state governors with prominent national profiles, some with aspirations for higher office, such as Arnold Schwarzenegger of California, other Republicans such as George Pataki of New York and Mitt Romney of Massachusetts and such Democrats as Bill Richardson of New Mexico and Tom Vilsack of Iowa. Indeed, it is possible to envision presidential primaries, in 2008 or 2012, where multiple candidates may emanate from statehouses from which they can claim more constructive climate policy engagement than any of their recent presidential predecessors.
Diffusion across the States
Much of the existing infrastructure of state climate programs has been individually tailored to the needs of a particular state. However, there is increasing evidence that some policies enacted in one state ultimately are being replicated in one or more additional states. There is, in fact, precedent in other policy arenas for such “policy diffusion” to spread across the nation and become, in effect, de facto national policy. Under such circumstances, it may be possible for the states to simply negotiate interstate differences and implement these inter-related programs. There may also be some tipping point at which diffusion reaches sufficient numbers of states that the federal government concludes that it should respond by drawing from these state models and establishing some version of this on a national basis.
There are several areas in which climate policy enactment in one jurisdiction has already been duplicated elsewhere. The policy tool that appears to be diffusing most rapidly is the RPS, which was operational in 22 states as of mid-2006. The first RPS was enacted in 1991 in Iowa, with little if any attention to greenhouse gas impacts. Subsequently, the pace of adoption has intensified, with four new RPS programs approved in 2005 and three existing ones significantly expanded during that period. Collectively, these policies are projected to add 26,000 megawatts of renewable electricity by 2015.
Particular RPS features vary by state but all such programs mandate a certain increase over time in the level of renewable energy that must be provided by all electricity providers in a state. For example, the State of Nevada passed legislation in June 2005 that will require the state’s utilities to gradually increase their supply of renewable energy, ultimately reaching 20 percent by 2015. This legislation passed with unanimous support in both legislative chambers and was endorsed by Republican Governor Kenny Guinn. It built on a set of earlier laws, each expanding the state’s promotion of renewable energy. Nevada, like virtually every other state that has enacted an RPS, provides regulated utilities considerable flexibility in finding ways to meet renewable mandates through so-called “renewable energy credit” programs that function much like other market-based programs and promise to reduce compliance costs.
RPS programs appear likely to continue to diffuse in coming years, reflecting recent legislative enactments and the continuing exploration of this approach as a policy option in a number of other state legislatures. In turn, several states with established RPSs, such as Texas, have found them so successful in terms of their ability to add renewable energy at reasonable costs, that they are looking actively to “increase the bar,” building on the exponential rate of renewable energy growth of recent years with a substantial increase in future mandate levels. Ironically, this U.S. state pattern coincides closely with the experience of the European Union, where a growing number of nations—including Denmark, Sweden, and the United Kingdom—have adopted their own RPSs as central components of their plans for meeting greenhouse gas reduction obligations. One growing challenge as RPSs proliferate will be differential state requirements, ranging from varied definitions of what constitutes renewable energy to state efforts to maximize generation of instate renewable sources for economic development reasons. The former issue poses challenges for renewable energy market development in areas where generators serve multiple states whereas the latter raises questions of state adherence to the Commerce Clause of the U.S. Constitution.
Regionalism: Between Nation and State
There is also ample precedent in U.S. federalism for states to work cooperatively on common concerns and, in some instances, formalize regional approaches involving two or more states. Some regional strategies take a permanent structure, such as interstate compacts, which involve a formal agreement ratified by participating states and ultimately Congress. These have been used extensively among states that share responsibility for an ecosystem or common boundary. Other strategies may entail establishing multi-state organizations or commissions to facilitate ongoing negotiation over particular issues or less formal agreements outlining reciprocal policy commitments.
As state climate policies proliferate and diffuse, it is entirely possible that certain clusters of states may become regions in practice even in the absence of formal agreements. All southwestern states between California and Texas, for example, have an RPS. It is increasingly possible to envision inter-state trading of renewable energy credits and other forms of cooperation that link these state programs. But more formal regional arrangements are also under consideration, perhaps most notable among northeastern states, where relatively small physical size and heavy population foster considerable economic and environmental interdependence. States in this region have a strong tradition of working together, whether campaigning for federal air emission standards to deter acid rain or common regional standards negotiated with the U.S. Environmental Protection Agency’s New England office.
For more than three decades, New England’s governors have further formalized this partnership through an organization that links them in cooperative ventures with the five eastern provinces of Canada. The respective premiers and governors meet annually, with environmental and energy concerns often paramount. In 2001, the leaders of these jurisdictions, representing five different political parties, agreed to common greenhouse gas reduction goals, reaching “at least” 10 percent below 1990 levels by 2020, followed by more significant reductions thereafter. These goals are not formally binding, even in Canada, which has been bound by Kyoto after its 2002 ratification of the Protocol. But they have triggered exploration of common strategies and prodded some jurisdictions, particularly participating states, to take more aggressive steps on climate policy than ever before.
Perhaps the most vibrant regional initiative that involves U.S. states is the so-called Regional Greenhouse Gas Initiative (RGGI). RGGI was launched in 2003, when New York Governor Pataki invited his counterparts from 10 neighboring states and Washington, D.C.’s mayor to explore the possibilities of establishing a regional cap-and-trade program for reducing carbon dioxide emissions from all fossil fuel-burning power plants located within the region. At this point, states such as Massachusetts and New Hampshire had already taken formal action to cap greenhouse gas emissions from their own coal-burning plants and similar steps were under consideration elsewhere. New York completed a multi-year review to confront climate change, which included a number of renewable energy initiatives and a pledge to reduce emissions five percent below 1990 levels by 2010 and 10 percent below 1990 levels by 2020. But state policy analysts concluded that a regional approach to cap-and trade would be more cost-effective given the strong inter-state linkages in regional electricity distribution.
New York reached agreement in December 2005 with six other states (Connecticut, Delaware, Maine, New Hampshire, New Jersey, and Vermont) on a regional cap-and-trade program. Maryland joined RGGI in 2006, Massachusetts and Rhode Island were active in negotiations but have decided for now not to join, and Pennsylvania, Washington, D.C., and the province of New Brunswick continue as formal observers and may ultimately decide to join the initiative. Development of a model rule addressing all key provisions continues through 2006, with the goal of formally launching the cap-and-trade program in January 2009. RGGI would cap regional emissions at 2009 levels through 2014, and then reduce these 10 percent below that level by 2018. The RGGI process emulates some of the framework for interstate coordination in reducing nitrogen oxides emissions in the northeastern Ozone Transport Region, but entails exclusively a negotiation among states without any input from federal officials. Consequently, a major RGGI goal is to establish and implement a regional carbon emissions cap while “accommodating, to the extent feasible, the diversity in policies and programs in individual states”. In that regard, RGGI bears a rather significant resemblance to Europe’s Emissions Trading System (ETS) that was launched in February 2005 and has triggered “informal contacts between state officials and representatives of the European Commission and European member states”.
Yet another variant of a multi-state approach involves an extension of “regionalism” to include states that are not necessarily contiguous with one another. Under federal air pollution legislation, for example, California enjoys unique status that it can parlay to establish a network of states with regulatory standards more stringent than those of the federal government. Congress concluded in the 1970s that California was so far ahead of the federal government in confronting air emissions that it could take any emerging federal air standard as a minimum from which it could establish its own regulations. The remaining states would then be free to adhere to federal standards or join forces with California, often unleashing “upward bidding” in air policy.
California chose in 2002 to revisit those powers, becoming the first Western government to mandate carbon dioxide caps for motor vehicles. This took the form of legislation, signed by former Democratic Governor Gray Davis that went to considerable lengths to characterize carbon dioxide as an air pollutant and therefore a natural extension of its regulatory powers. The state has continued to assert that this does not encroach on fuel economy standards, which clearly remain under federal control. Since enactment, the California Air Resources Board has moved toward implementation, which is scheduled to go into effect later in the current decade and could achieve reductions of up to 30 percent in vehicle emissions in future fleets. This legislation has been a cornerstone of a larger California effort on climate change, which has resulted in some of the lowest per capita emission rates of any state and relatively modest emission growth since 1990. In fact, under Republican Governor Schwarzenegger, the state has only intensified its efforts on climate, leading to his June 2005 executive order that vowed to return California to 2000 emission levels by 2010, followed by a return to 1990 levels by 2020 and reductions that are 80 percent below current levels by 2050.
These steps have already had effects beyond state boundaries. Within two weeks of the Schwarzenegger executive order, New Mexico’s Richardson proposed comparable reductions through his own executive order authority. Perhaps more important, 10 states have formally approved the California vehicle standards for carbon. These include the States of Oregon and Washington and eight Northeastern states, with decisions pending in additional states. This creates the very real possibility of two separate “regional” standards for vehicular emissions, including the “coastal strategy” (involving California and collaborating East and West Coast states) alongside the central states. Litigation from automobile manufacturers and the Bush administration will ensue, based on alleged state encroachment on federal terrain. Nonetheless, this additional re-definition of regionalism illustrates the array of possibilities whereby multiple states might begin to pool their efforts and work collaboratively.
Direct Democracy: Taking It to the People
Direct democracy has been an alternative route for policymaking in more than 30 states for nearly a century, reflecting its origins in the populist and progressive movements. But its use in the state context has grown at an exponential rate over the past two decades, particularly in the controversial arenas of environmental and energy policy. Indeed, state constitutions impose few if any restrictions on the kinds of policy questions that can be addressed through direct democracy and a number of states, such as California and Oregon, make extensive use of this provision.
In November 2004, state climate policy moved from the exclusive realm of representative institutions into the arena of ballot propositions. Colorado voters, by a 54-to-46 margin, approved Proposition 37, which established an RPS for that state. This initiative set forth an ambitious target for steadily increasing the level of electricity in the state derived from renewable sources from its current level of approximately two percent to 10 percent by 2015. Many other provisions in this legislation are comparable to RPSs elsewhere. What makes Colorado unique is that proponents turned to direct democracy after three efforts to enact such a statute were narrowly defeated in the Colorado legislature.
In Colorado, a bipartisan group led by the Republican Speaker of the State Assembly and a Democratic member of the U.S. House of Representatives assembled a very broad coalition, attracting agricultural, environmental, and public health, as well as manufacturers of renewable energy systems that stood to gain from the legislation. Most major media outlets in the state offered strong endorsement. Despite a massive opposition campaign led by the state’s dominant utility, Xcel Energy, the proposition is now state law and has moved through an extensive rule-making process.
Other environmental cases suggest that once one state turns to the ballot on a salient issue others often follow suit. Ironically, the RPS issue continues to move apace in many jurisdictions, with Montana following Colorado—through conventional methods—shortly thereafter. But this sets an important precedent and further underscores the possibilities for expanding the state role in climate policy development. Indeed, climate policy proponents in other states, most notably Oregon and Washington, have already begun to examine the Colorado case in some detail in weighing possible next steps.
State Attorneys General: Taking It to the Courts
Alongside citizen-driven policy, states also have turned increasingly to litigation against their neighbors or the federal government for actions—or inactions—seen to cause environmental harm to their states and citizenries. The vast majority of state attorneys general are elected officials, many of whom become very prominent figures in state governance. They often possess considerable independence from their respective governors and have proven increasingly bold in expanding the definition of their roles. Huge shifts in policy have followed attorney general-led interventions in such areas as regulation of the tobacco and financial services industries. There are strong signals that climate policy is emerging as the next target for this type of engagement.
In recent years, a loose coalition of attorneys general has formed, exploring ways in which they might develop litigation to force the federal government to act. For example, in February 2003, attorneys general from California, Connecticut, Illinois, Maine, Massachusetts, New Jersey, New Mexico, New York, Oregon, Rhode Island, Vermont, and Washington, filed suit in federal court challenging a Bush administration decision to exclude carbon dioxide as a pollutant regulated under the 1990 Clean Air Act Amendments. Other initiatives have followed, contending that climate change is posing a significant threat to state residents and seeking a judicial remedy that would force some degree of active federal engagement.
Such steps have often been endorsed and supported by coalitions of environmental groups and state regulatory agencies, which often supply detail and expertise in fashioning the litigation strategy. It remains much too soon to discern what impact, if any, these respective approaches might have, since they move the federal courts into new policy terrain and are likely to receive very different hearings in respective federal judicial districts. Nonetheless, they represent yet another strategy at states appear increasingly willing to employ in assuming a lead role in U.S. climate policy formation. This approach, of course, appears particularly unique in that it is designed not to result in intra-state action or inter-state cooperation. Instead, the focus is finding state-based policy levers that might compel a recalcitrant federal government to take action on the climate issue.
The Second Generation and Beyond
At mid-point of the current decade, there is no sign whatsoever of a slowing pace in state engagement on climate change. If anything, most trends point in the opposite direction. Long-active states are expanding their efforts and elevating their reduction commitments. Long-dormant states are, in some instances, showing signs of engagement. Consequently, one could increasingly envision a U.S. climate policy system emerging from a bottom-up basis, with an expanding and perhaps permanent role for states to play in continued policy development and implementation. In certain respects, this appears to parallel the experience in other federal or federated systems, whether or not they have ratified Kyoto.
In Europe, for example, striking parallels exist with the case of the United States. The European Union remains formally bound to meeting Kyoto reduction targets, which led to the launch of the European Union Emissions Trading System (EU ETS) in 2005 and the first volley of cross-national carbon credit trading. However, each EU member has a different reduction target and is free to establish its own internal policies. This has resulted in a tapestry of different strategies and wide variation in the degrees of success for individual nations in approaching their pledged reductions. Just as some states lead while others lag in U.S. climate policy development, it is increasingly clear that a similar dynamic operates among European nations. Australia appears to be following an American pattern, with growing state involvement amid federal disengagement. However, this phenomenon is not universal in federal systems, reflected in the glacial pace of climate policy development in Canada and its provinces despite federal ratification of Kyoto.
At the same time, there may be three distinct challenges facing continued or expanding state involvement on climate policy, some unique to the context of the United States. These have yet to have any demonstrable effect on state policy but could potentially have a chilling impact. First, a consortium of well-heeled organizations hostile to any U.S. government action to reduce greenhouse gases has become increasingly vocal in the state policy-making process. Organizations such as the Heartland Institute and Competitive Enterprise Institute have published reports that portray state-based initiatives as posing dire economic and social consequences. Such releases routinely condemn state climate policies as “mini-Kyoto regimes,” offering catastrophic estimates of their future economic impacts. Perhaps most importantly, the American Legislative Exchange Council has launched an aggressive campaign to reverse or rescind existing state climate laws, although it has had little demonstrable effect on state policy thus far.
Second, it appears increasingly likely that various interest groups and the executive branch of the federal government may join forces in bringing legal or administrative challenge against many state climate policy initiatives on constitutional grounds. This is somewhat ironic given the long-standing emphasis in the Republican Party on the virtues of decentralization and the fact that so many Bush administration leaders, including the president, were leaders in climate policy development when they worked in their respective statehouses. Nonetheless, there are growing indications that serious challenges may ensue. Perhaps the most prominent confrontation will focus on the California vehicle emissions program, but other challenges are also possible through the route of preemption via legislative or administrative action.
Third, as a growing number of states become active players in climate policy development and implementation, inevitable questions emerge regarding interstate collaboration. This is most apparent in cases such as RGGI, which require considerable cooperation between multiple states where turnover of elected officials is a constant. Despite the substantial body of agreement reached among RGGI states, a number of questions remain concerning long-term viability. New York launched the process and has footed much of the bill to date. However, some states have begun to complain that it has become too dominant in inter-state deliberations. Issues such as locating a RGGI office or the degree of collaboration with existing regional environmental authorities, such as the Northeast States for Coordinated Air Use Management, remain points of contention, before moving into even trickier issues such as defining acceptable offsets and addressing “carbon leakage” from energy imports outside the RGGI cap. The decisions of Massachusetts and Rhode Island to refrain from joining RGGI, at least for now, further underscore the fragility of such a complex intergovernmental network that moves forward without constructive input from the federal government.
Despite these potential impediments, all indicators suggest that climate policy has not only reached the agenda of most state capitals but is actively moving ahead with fairly broad political support. It appears reasonable to anticipate continued state climate policy engagement in coming years, giving a growing set of states a level of climate commitment and expertise that rivals the most aggressive nations pursuing Kyoto. All of this suggests that the U.S. context for climate policy is far more complex—and far less fruitless—than many conventional depictions would suggest. Moreover, there are abundant precedents in other policy areas whereby states take the lead and remain active in long-term policy development and implementation. Consequently, there is ample reason to suspect that states will remain central players in the evolution of U.S. climate policy, with considerable potential for achieving emission reductions and providing lessons and models worthy of consideration in Washington and around the world.
Content Source: Wikimedia Commons
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