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The New Framework for Climate Finance Under the United Nations Framework Convention on Climate Change: A Breakthrough or an Empty Promise?

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Climate Change and the Law

Part of the book series: Ius Gentium: Comparative Perspectives on Law and Justice ((IUSGENT,volume 21))

Abstract

In this chapter, we first show that the framework for climate finance under the United Nations Framework Convention on Climate Change (UNFCCC) has been controversial, fragmented and insufficient to meet the growing financing needs of developing countries for adaptation and mitigation. We then describe and analyze the reformed framework for climate finance under the UNFCCC. We argue that the establishment of the Green Climate Fund constitutes an important milestone and progress has also been made in other respects. However, long-standing divides and mistrust between developed and developing countries have shaped the negotiations and continue to be reflected in their outcomes (and non-outcomes). This, together with the lack of clarity over long-term sources of finance, casts shadows over the future effectiveness of the new framework.

Yulia Yamineva holds a Ph.D. in International Studies from the University of Cambridge. She is currently a postdoctoral researcher at the Department of Law, University of Eastern Finland. She followed the UNFCCC negotiations in 2007–2009 for the Earth Negotiations Bulletin and was a consultant on climate finance based at the UNFCCC Secretariat in 2010–2011. Kati Kulovesi holds a Ph.D. from the London School of Economics and Political Science. She is Adjunct Professor in Climate Law at the Department of Law, University of Eastern Finland.

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Notes

  1. 1.

    United Nations Framework Convention on Climate Change, New York, 9 May 1992, in force 21 March 1994, 31 International Legal Materials (1992), 849. (UNFCCC).

  2. 2.

    Susanna Olbrisch et al., “Estimates of Incremental Investment for and Cost of Mitigation Measures in Developing Countries”, 11 Climate Policy (2011), 970, at 981, Table 6.

  3. 3.

    Kyoto Protocol to the United Nations Framework Convention on Climate Change, Kyoto, 10 December 1997, in force 16 February 2005, 37 International Legal Materials (1998), 22.

  4. 4.

    Olbrisch et al., “Estimates of Incremental Investment for and Cost of Mitigation Measures in Developing Countries”, supra, note 2, at 981.

  5. 5.

    Ibid.

  6. 6.

    Ibid.

  7. 7.

    Joel Smith et al., “Development and Climate Change Adaptation Funding: Coordination and Integration”, 11 Climate Policy (2011), 987, at 990–992.

  8. 8.

    UNFCCC, Investment and Financial Flows to Address Climate Change (October 2007), para. 5.

  9. 9.

    Ibid., para. 10.

  10. 10.

    Richard B. Stewart, Benedict Kingsbury and Bryce Rudyk, “Climate Finance for Limiting Emissions and Promoting Green Development”, in Richard B. Stewart, Benedict Kingsbury and Bryce Rudyk (eds), Climate Finance: Regulatory and Funding Strategies for Climate Change and Global Development (New York and London: New York University Press, 2009), 3, at 15.

  11. 11.

    See similarly Luis Gomez-Echeverri and Benito Müller, “The Financial Mechanism of the UNFCCC: A Brief History, ECBI Policy Brief, April 2009, at 1.

  12. 12.

    Ibid., at 4.

  13. 13.

    Decision 1/CP.16, The Cancun agreements: outcome of the work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention, UN Doc. FCCC/CP/2010/7/Add.1, 15 March 2011.

  14. 14.

    UNFCCC, supra, note 1, Art. 4.4 requires Annex II Parties to “assist developing countries that are particularly vulnerable to the adverse effects of climate change in meeting costs of adaptation to those adverse effects.” Article 4.8 of the UNFCCC requires Parties to give “full consideration” to actions that are needed under the UNFCCC to meet the needs and concerns of developing countries arising from the adverse effects of climate change. Such actions can relate to funding, insurance and the transfer of technology.

  15. 15.

    Ibid., Art. 4.5 requires Annex II Parties to take “all practicable steps to promote, facilitate and finance technology transfer to other Parties, in particular developing country Parties, to enable them to implement the Convention’s provisions.”

  16. 16.

    Ibid., Art. 3.1.

  17. 17.

    Farhana Yamin and Joanne Depledge, The International Climate Change Regime: A Guide to Rules, Institutions and Procedures (Cambridge: Cambridge University Press, 2004), at 272.

  18. 18.

    Ibid., at 274.

  19. 19.

    Ibid., at 273.

  20. 20.

    Ibid., at 265.

  21. 21.

    Ibid., at 267.

  22. 22.

    Ibid.

  23. 23.

    Ibid.

  24. 24.

    Ibid., at 268. See also Decision 12/CP.3, Annex to the Memorandum of Understanding on the determination of funding necessary and available for the implementation of the Convention, UN Doc. FCCC/CP/1997/7/Add.1, 25 March 1998.

  25. 25.

    Ibid.

  26. 26.

    See, for example, Decision 9/CP.10, Assessment of funding to assist developing countries in fulfilling their commitments under the Convention, UN Doc. FCCC/CP/2004/10/Add.1, 19 April 2005, para. 1, which merely provides that the assessment report prepared by the Secretariat, in collaboration with the GEF, constitutes an input from the COP to the negotiations on the fourth GEF replenishment.

  27. 27.

    Gomez-Echeverri and Müller, “The Financial Mechanism of the UNFCCC”, supra, note 11, at 6.

  28. 28.

    Yamin and Depledge, The International Climate Change Regime, supra, note 17, at 276.

  29. 29.

    Ibid.

  30. 30.

    Ibid.

  31. 31.

    Decision 7/CP.7, Funding under the Convention, UN Doc. FCCC/CP/2001/13/Add.1, 21 January 2002, para. 1(a).

  32. 32.

    Decision 10/CP.7, Funding under the Kyoto Protocol, UN Doc. FCCC/CP/2001/13/Add.1, 21 January 2002, para. 1(a).

  33. 33.

    Guidelines for the Preparation of National Communications by Parties Included in Annex I to the Convention, UN Doc. FCCC/CP/1999/7, 16 February 2000, paras. 50–56. (Guidelines for Annex I National Communications).

  34. 34.

    Compilation and synthesis of fifth national communications. Note by the secretariat. Addendum. Financial resources, technology transfer, vulnerability, adaptation and other issues relating to the implementation of the Convention by Parties included in Annex I to the Convention, UN Doc. FCCC/SBI/2011/INF.1/Add.2, 20 May 2011, paras. 45–47.

  35. 35.

    Decision 5/CP.6, The Bonn Agreements on the implementation of the Buenos Aires Plan of Action, UN Doc. FCCC/CP/2001/5, 25 September 2001.

  36. 36.

    Compilation and synthesis of fifth national communications, supra, note 34.

  37. 37.

    Yamin and Depledge, The International Climate Change Regime, supra, note 17, at 278.

  38. 38.

    Charlotte Streck, “Ensuring New Finance and Real Emission Reduction: A Critical Review of the Additionality Concept”, 5 Carbon and Climate Law Review (2011), 158, at 162.

  39. 39.

    Ibid.

  40. 40.

    Yamin and Depledge, The International Climate Change Regime, supra, note 17, at 280.

  41. 41.

    Erik Haites, Development Perspectives for a Post-Copenhagen Climate Financing Architecture (OECD, 2010), at 12–13.

  42. 42.

    Yamin and Depledge, The International Climate Change Regime, supra, note 17, at 278.

  43. 43.

    Gomez-Echeverri and Müller, “The Financial Mechanism of the UNFCCC”, supra, note 11, at 3.

  44. 44.

    Decision 3/CP.4, Review of the financial mechanism, UN Doc. FCCC/CP/1998/16/Add.1, 25 January 2005, para. 1.

  45. 45.

    Convention on Biological Diversity, Rio de Janeiro, 5 June 1992, in force 29 December 1993, 34 International Legal Materials (1992), 822.

  46. 46.

    Stockholm Convention on Persistent Organic Pollutants, Stockholm, 22 May 2001, in force 17 May 2004, 40 International Legal Materials (2001), 532.

  47. 47.

    United Nations Convention to Combat Desertification in Those Countries Experiencing Serious Drought and/or Desertification, Particularly in Africa, Paris, 17 June 1994, in force 26 December 1996, 33 International Legal Materials (1994), 1328.

  48. 48.

    For detailed overview, see Jacob Werksman, “Consolidating Global Environmental Governance: New Lessons from the GEF?”, 2003, available at: www.environmentalgovernance.org/cms/wp-content/uploads/docs/dialogue/oct03/papers/Werksman%20GEF.pdf (last accessed on 30 March 2012).

  49. 49.

    Ibid., at 5.

  50. 50.

    GEF Council website, available at: http://www.thegef.org/gef/council (last accessed on 30 March 2012).

  51. 51.

    Ibid.

  52. 52.

    Ibid.

  53. 53.

    Ibid.

  54. 54.

    Instrument for the Establishment of the Restructured Global Environment Facility (October 2011), para. 25(c).

  55. 55.

    Yamin and Depledge, The International Climate Change Regime, supra, note 17, at 265.

  56. 56.

    Ibid.

  57. 57.

    Ibid.

  58. 58.

    Ibid.

  59. 59.

    Werksman, “Consolidating Global Environmental Governance”, supra, note 48, at 6.

  60. 60.

    Ibid.

  61. 61.

    Yamin and Depledge, The International Climate Change Regime, supra, note 17, at 265–266.

  62. 62.

    Ibid., at 283.

  63. 63.

    Gomez-Echeverri and Müller, “The Financial Mechanism of the UNFCCC”, supra, note 11, at 5.

  64. 64.

    Report of the Global Environment Facility to the Conference of the Parties, UN Doc. FCCC/CP/2011/7, 19 September 2011, at 2.

  65. 65.

    Ibid.

  66. 66.

    Ibid., at 1.

  67. 67.

    Ibid.

  68. 68.

    Ibid.

  69. 69.

    System for Transparent Allocation of Resources, GEF Policy Paper, GEF/P.3, 24 June 2010.

  70. 70.

    Decision 2/CP.12, Memorandum of Understanding between the Conference of the Parties and the Council of the Global Environment Facility, UN Doc FCCC/CP/1996/15/Add.1, 29 October 1996.

  71. 71.

    Ibid. See also UNFCCC, supra, note 1, Art. 11.1.

  72. 72.

    Gomez-Echeverri and Müller, “The Financial Mechanism of the UNFCCC”, supra, note 11, at 5.

  73. 73.

    M.J. Mace, “Funding for Adaptation to Climate Change: UNFCCC and GEF Developments since COP 7”, 14 Review of European Community and International Environmental Law (2005), 225, at 229.

  74. 74.

    Gomez-Echeverri and Müller, “The Financial Mechanism of the UNFCCC”, supra, note 11, at 4.

  75. 75.

    Decision 7/CP.7, supra, note 31, para. 2.

  76. 76.

    Report of the Global Environment Facility to the Conference of the Parties, supra, note 64, at 27.

  77. 77.

    Mace, “Funding for Adaptation to Climate Change”, supra, note 73, at 236.

  78. 78.

    GEF Evaluation Office, Assessment of the SCCF, October 2011, at 8.

  79. 79.

    Ibid.

  80. 80.

    Ibid.

  81. 81.

    Report of the Global Environment Facility to the Conference of the Parties, supra, note 64, at 25.

  82. 82.

    Ibid.

  83. 83.

    Ibid.

  84. 84.

    Decision 10/CP.7, supra, note 32.

  85. 85.

    Decision 1/CMP.3, Adaptation Fund, UN Doc. FCCC/KP/CMP/2007/9/Add.1, 14 March 2008, para. 3.

  86. 86.

    Ibid., para. 4.

  87. 87.

    The five UN regional groups are: Africa, Asia, Latin America and the Caribbean, Central and Eastern Europe, as well as Western Europe and Others.

  88. 88.

    Decision 1/CMP.3, supra, note 85, para. 6.

  89. 89.

    Ibid., para. 8.

  90. 90.

    COP/MOP 4 decided that the AFB should be conferred such legal capacity as necessary for the execution of its functions. See Decision 1/CMP.4, Adaptation Fund, UN Doc. FCCC/KP/CMP/2008/11/Add.2, 19 March 2009, para. 11. The German Parliament conferred legal capacity on the Adaptation Fund Board on 8 February 2011.

  91. 91.

    Report of the Adaptation Fund Board, Addendum: Review of the Interim Arrangements of the Adaptation Fund, UN Doc. FCCC/KP/CMP/2011/6/Add.1, 22 November 2011, para. 22.

  92. 92.

    Ibid., para. 26.

  93. 93.

    Decision 1/CMP.3, supra, note 85, para. 28 gives guidance on monetization.

  94. 94.

    Ibid.

  95. 95.

    Report of the Adaptation Fund Board, UN Doc. FCCC/KP/CMP/2011/6, 22 November 2011, para. 33.

  96. 96.

    Financial Status of the AF Trust Fund, AFB/EFC.8/7, 14 February 2012, Annex 2.

  97. 97.

    Ibid.

  98. 98.

    Decision 1/CMP.3, supra, note 85, para. 29.

  99. 99.

    “Summary of the Fourteenth Conference of Parties to the UN Framework Convention on Climate Change and Fourth Meeting of Parties to the Kyoto Protocol”, The Earth Negotiations Bulletin 12(395), 15 December 2008.

  100. 100.

    Decision 1/CMP.3, supra, note 85, para. 30.

  101. 101.

    Decision 5/CMP.2, Adaptation Fund, UN Doc. FCCC/KP/CMP/2006/10/Add.1, 2 March 2007.

  102. 102.

    Website of the Adaptation Fund, available at: http://www.adaptation-fund.org/about/accreditation-panel (last accessed 2 April 2012).

  103. 103.

    Ibid.

  104. 104.

    Decision 1/CMP.4, supra, note 90, Annex IV.

  105. 105.

    Report of the Adaptation Fund Board, UN Doc. FCCC/KP/CMP/2010/7, 4 November 2010, para. 23.

  106. 106.

    Ibid., para. 24.

  107. 107.

    Ibid.

  108. 108.

    Report of the Adaptation Fund Board, UN Doc. FCCC/KP/CMP/2011/6, 22 November 2011, para. 23.

  109. 109.

    Ibid., para. 25.

  110. 110.

    Ibid., para. 26.

  111. 111.

    Decision 1/CP.13, The Bali Action Plan, UN Doc. FCCC/CP/2007/6/Add.1, 14 March 2008.

  112. 112.

    Ibid., para. 1(e).

  113. 113.

    For a review of the situation immediately before Copenhagen, see Kati Kulovesi and María Gutíerrez, “Climate Change Negotiations Update: Prospects for a Copenhagen Agreed Outcome in December 2009”, 18 Review of European Community and International Environmental Law (2009), 229, at 241.

  114. 114.

    Ideas and Proposals on the Elements Contained in Paragraph 1 of the Bali Action Plan. Submissions from Parties, UN Doc. FCCC/AWGLCA/2008/MISC.2, 14 August 2008, paras. 40–45.

  115. 115.

    “Summary of the Fifth Session of the Ad Hoc Working Group on Long-Term Cooperative Action and the Seventh Session of the Ad Hoc Working Group on Further Commitments for Annex I Parties under the Kyoto Protocol: 29 March – 8 April 2009”, The Earth Negotiations Bulletin 12(407), 8 April 2009.

  116. 116.

    For analysis, see Lavanya Rajamani, “The Making and Unmaking of the Copenhagen Accord”, 59 International and Comparative Law Quarterly (2010), 825; Per Meilstrup, “The Runaway Summit: The Background Story of the Danish Presidency of COP 15, the UN Climate Change Conference”, Danish Foreign Policy Yearbook (2010), 113; Daniel Bodansky, “The Copenhagen Climate Change Conference: A Post-Mortem”, 104 American Journal of International Law (2010), 230.

  117. 117.

    Decision 2/CP.15, Copenhagen Accord, UN Doc. FCCC/CP/2009/11/Add.1, 30 March 2010.

  118. 118.

    For an overview of the final plenary, see “Summary and Analysis of the Copenhagen Climate Change Conference: 7–19 December 2009”, The Earth Negotiations Bulletin 12 (459), 22 December 2009.

  119. 119.

    Decision 2/CP.15, supra, note 117. The chapeau of the Copenhagen Accord annexed to the decision lists countries supporting the document.

  120. 120.

    Ibid., para. 10.

  121. 121.

    Ibid., para. 8.

  122. 122.

    Ibid.

  123. 123.

    Ibid., para. 9.

  124. 124.

    Asheline Appleton and Kati Kulovesi, “A Summary Report of the Geneva Dialogue on Climate Finance”, 5 September 2010, available at: http://www.iisd.ca/download/pdf/sd/ymbvol179num1e.pdf (last accessed on 31 March 2012).

  125. 125.

    Decision 1/CP.16, supra, note 13.

  126. 126.

    Ibid., para. 102.

  127. 127.

    Ibid., para. 103.

  128. 128.

    Ibid., para. 109.

  129. 129.

    Ibid., para. 112.

  130. 130.

    Ibid., paras. 95 and 98.

  131. 131.

    Ibid., para. 98.

  132. 132.

    Ibid., para. 97.

  133. 133.

    Ibid., para. 99.

  134. 134.

    Negotiating text. Note by the secretariat, UN Doc. FCCC/AWGLCA/2010/14, 13 August 2010.

  135. 135.

    Decision 3/CP.17, Launching the Green Climate Fund, UN Doc. FCCC/CP/2011/9/Add.1, 15 March 2012.

  136. 136.

    Decision 2/CP.17, Outcome of the Work of the Ad Hoc Working Group on Long-term Cooperative Action under the Convention, UN Doc. FCCC/CP/2011/9/Add.1, 15 March 2012, para. 127.

  137. 137.

    Decision 2/CP.15, supra, note 117, para. 8.

  138. 138.

    Decision 1/CP.16, supra, note 13, para. 96.

  139. 139.

    Submissions on information from developed country parties on the resources provided to fulfil the commitment referred to in decision 1/CP.16, paragraph 95. Note by the Secretariat, UN Doc. FCCC/CP/2011/INF.1, 15 August 2011.

  140. 140.

    For a web site with updated information on fast-start finance, see UNFCCC, “Fast-start Finance,” available at: http://unfccc.int/cooperation_support/financial_mechanism/fast_start_finance/items/5646.php (last accessed on 2 April 2012).

  141. 141.

    Submissions on information from developed country parties on the resources provided to fulfil the commitment referred to in decision 1/CP.16, para. 95, supra, note 139.

  142. 142.

    Kristen Stasio et. al., “Summary of Developed Country ‘Fast-Start’ Climate Finance Pledges”, World Resources Institute, November 2011, available at:

    http://www.wri.org/publication/summary-of-developed-country-fast-start-climate-finance-pledges (last accessed on 2 April 2012).

  143. 143.

    Submissions on information from developed country parties on the resources provided to fulfil the commitment referred to in decision 1/CP.16, para. 95, supra, note 139.

  144. 144.

    For synthesis of available estimates for mitigation, see Olbrisch et al., “Estimates of Incremental Investment for and Cost of Mitigation Measures in Developing Countries”, supra, note 2, at 970–986. On adaptation, see Smith et al., “Development and Climate Change Adaptation Funding: Coordination and Integration”, supra, note 7, at 987–1000.

  145. 145.

    Erik Haites, “Climate Change Finance – editorial”, 11 Climate Policy (2011), 963, at 964.

  146. 146.

    Olbrisch et al., “Estimates of Incremental Investment for and Cost of Mitigation Measures in Developing Countries”, supra, note 2, at 971.

  147. 147.

    Ibidem.

  148. 148.

    UNFCCC, Investment and financial flows to address climate change, supra, note 8, at 175, table IX-64.

  149. 149.

    Olsbrisch et al., “Estimates of Incremental Investment for and Cost of Mitigation Measures in Developing Countries”, supra, note 2, at 974.

  150. 150.

    Ibid., at 975, table 2.

  151. 151.

    UNFCCC, Investment and Financial Flows to Address Climate Change, supra, note 9, para. 26 of the executive summary.

  152. 152.

    Smith et. al., “Development and Climate Change Adaptation Funding: Coordination and Integration”, supra, note 7, at 989.

  153. 153.

    Report of the Subsidiary Body for Implementation on its 28th session, held in Bonn from 4 to 13 June 2008, UN Doc. FCCC/SBI/2008/8, 11 July 2008, para. 30.

  154. 154.

    Synthesis report on the National Economic, Environment and Development Study (NEEDS) for Climate Change Project, Note by the secretariat, UN Doc. FCCC/SBI/2010/INF.7, 24 November 2010.

  155. 155.

    Decision 2/CP.17, supra, note 136, para. 121(f).

  156. 156.

    Decision 2/CP.15, supra, note 117, para. 9.

  157. 157.

    Report of the Secretary-General’s High-Level Advisory Group on Climate Change Financing, 5 November 2010, at 5.

  158. 158.

    Ibid.

  159. 159.

    Decision 2/CP.17, supra, note 136, paras. 127–131.

  160. 160.

    Ibid., para. 130.

  161. 161.

    Ibid., paras. 127 and 129.

  162. 162.

    Guidelines for Annex I National Communications, supra, note 33.

  163. 163.

    Compilation and synthesis of fifth national communications, supra, note 34.

  164. 164.

    Guidelines for Annex I National Communications, supra, note 33.

  165. 165.

    Decision 1/CP.16, supra, note 13, para. 40 (a).

  166. 166.

    Ibid., para. 41.

  167. 167.

    Ibid., para. 42.

  168. 168.

    Decision 2/CP.17, supra, note 136, Annex I, paras. 16–20.

  169. 169.

    Ibid., para. 13.

  170. 170.

    Ibid., para. 19.

  171. 171.

    Decision 2/CP.17, supra, note 136, Annex II, para. 4.

  172. 172.

    Ibid., para. 5.

  173. 173.

    Decision 1/CP.16, supra, note 13, paras. 102–111.

  174. 174.

    Ibid., Appendix III.

  175. 175.

    Decision 3/CP.17, supra, note 135, Annex containing the Governing Instrument of the Green Climate Fund.

  176. 176.

    Ibid., para. 3.

  177. 177.

    Ibid., para. 1.

  178. 178.

    Ibid., para. 3.

  179. 179.

    Ibid., paras. 29–30.

  180. 180.

    Ibid., para. 4.

  181. 181.

    Ibid., para. 6.

  182. 182.

    Decision 1/CP.16, supra, note 13, para. 103.

  183. 183.

    Ibid.

  184. 184.

    Decision 3/CP.17, supra, note 135, Annex containing the Governing Instrument of the Green Climate Fund, para. 35.

  185. 185.

    Ibid., paras. 37 and 54.

  186. 186.

    Ibid., paras. 45–49.

  187. 187.

    Ibid., para. 50.

  188. 188.

    Ibid., para. 52.

  189. 189.

    Ibid., para. 31.

  190. 190.

    Ibid., para. 46.

  191. 191.

    Decision 1/CP.16, supra, note 13, paras. 105–107.

  192. 192.

    Ibid., para. 108.

  193. 193.

    Ibid., para. 112.

  194. 194.

    Decision 2/CP.17, supra, note 136, Annex VI.

  195. 195.

    Ibid., para. 1.

  196. 196.

    Ibid., para. 2.

  197. 197.

    Decision 2/CP.17, supra, note 136, para. 121(a).

  198. 198.

    Ibid., para. 121(c) – (e).

  199. 199.

    Ibid., para. 121(b).

  200. 200.

    Ibid., para. 121(f).

  201. 201.

    Decision 1/CP.16, supra, note 13, para. 52.

  202. 202.

    Ibid., paras. 53–59.

  203. 203.

    Decision 2/CP.17, supra, note 136, para. 45.

  204. 204.

    Ibid., para. 48.

  205. 205.

    Ibid., para. 46.

  206. 206.

    See, for instance, Net official development assistance from Development Assistance Committee and other OECD members in 2011 – preliminary data for 2011, available at http://www.oecd.org/dataoecd/44/13/50060310.pdf (last accessed 30 April 2012)

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Yamineva, Y., Kulovesi, K. (2013). The New Framework for Climate Finance Under the United Nations Framework Convention on Climate Change: A Breakthrough or an Empty Promise?. In: Hollo, E., Kulovesi, K., Mehling, M. (eds) Climate Change and the Law. Ius Gentium: Comparative Perspectives on Law and Justice, vol 21. Springer, Dordrecht. https://doi.org/10.1007/978-94-007-5440-9_9

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