Green Strategy

Michael Casey has an interesting piece in today’s Irish Times.

Two comments: Don’t believe everything that Bjorn Lomborg says about me.

Casey is a bit too pessimistic about Ireland’s potential for research. Ireland does not have the scale to revolutionise global energy supply; and Irish politicians are betting on technologies that are either a very long shot (wave power) or more likely to succeed elsewhere (electric vehicles). But research in Ireland can make some small but useful contributions. Integration of renewables or advanced biofuels are two examples.

36 replies on “Green Strategy”

It would seem blindingly obvious that Ireland should not seek to develop new forms of energy generation technology. That is a venture capital. There is plenty of investment in the development of energy production all around the world. Also, because of the amount of money being pumpe into green-tech there are going to be more and more bogus ventures formed to suck up tax-payer money.

That is not to say that the government shouldn’t incentivise businesses to develop good energy crisis and environment crisis relevant products. The article doesn’t distinguish between green-tech for the sake of saving the planet and green-tech for the benefit of the country. Kingspan, for example, are world leaders in green-tech building materials. There are many established areas such as battery technology, building materials and so forth where advances will be made and profitable businesses will prosper. This is the Soros view of green-tech driving the world economy.

By the by, I think that it may have been shown that it is virtually impossible that technological improvements alone can save us from global warming. I think there may be research on this point and I know Tim Harford has said that he has now realised that the impact technology change can make is limited. I also think I have heard the same point made in IIASA podacasts some time ago but I am a bit vague on the point. Perhaps somebody can clarify as to what empirical research there has been on the maximum possible benefts which new technologies can bring.

Michael Casey said: “In the second place, the environmental damage may well reduce the prospects for economic growth in the future. Flooding, for example, could damage the fertility of the soil. “

It is clear that the vulnerability of infrastructure and develoment to envoronmental conditions is not being taken into account. There is legislation and organs to deal with this but it is not working. If the agencies cannot prevent development which causes damage then we can have zero confidence that anyone is competently looking at futureproofing existing infrastructure. Futureproofing infrastructure would appear to be an economic imperative. (Obviously we should concentrate our efforts at places other than Dublin Airport. 🙂 )

for clarity

“The article doesn’t distinguish between green-tech for the sake of saving the planet and green-tech for the benefit of the country” should have read “The article doesn’t distinguish between green-tech for the sake of saving the planet and green-tech for the benefit of the national economy, i.e., green-tech as a profit and employment opportunity.”

Depressing stuff: I wish writers/commentators etc., would please state clearly what their economic Model-in-Use is. I can (but care not to) assume its Smithian (aka: Permagrowth). If this assumption is in fact valid, then their ‘green energy’ and ‘sustainability’ proposals are doomed to energy failure.

I understand, and please correct me if this is incorrect, that many uses of electricity are energy inefficient and plain wasteful of the original finite production resource – fossil fuels. Electric cars (private vehicles, that is) are almost an obscene waste of energy. I accept that the sentiment is against me on this point of view, but the Second Law of Thermodynamics is not! So I’ll stick with the latter – its been around a tad longer than the former.

Grow trees please – preferably some fruit bearers. Let the cellular chlorophyll and photosynthetic metabolism do the heavy lifting. The photons are free.

B Peter

Call me old-fashioned and out of touch, but I hated this article.

It manages to skate around the central point of applying economics to environmental problems – that negative externatilites must be priced and charged to polluters.

It is simply not acceptable to dismiss this basic economic fact as being politically unfeasible, and then go on to promote a series of hair-brained subsidy ideas that will, almost by definition, be doomed to inefficiency and rent capture by eco-chancers.

Making polluters pay will raise profit levels in exactly those new technologies which truly offer an environmental return.

More important that looking for a magic bullet is optimising the use of current technologies. This cold winter, heat is p*ssing out of every old building in this crumbling city, precisely because nobody is paying for that externality.

Graham Stull – “This cold winter, heat is p*ssing out of every old building in this crumbling city, precisely because nobody is paying for that externality.”

Do you not pay for your own heating??? Every home-owner and business owner I know has been acutely aware of energy costs, and specifically heating costs, for the last year.

In terms of research Ireland as any other country can make a contribution but one has to be realistic given the scale of resources that will be applied – if I remember correctly Germany has already spent 20 times as much on energy related research over the last few years than Ireland is planning to spend. Of course they may have blown their money on useless programmes but I doubt it. Except for certain nieches others are likely to be ahead of us. That of course does not mean we can’t adopt technologies developed elsewhere.

In general, as energy/environmental issues get more severe the return to development of more efficient/alternative technologies will increase giving a good incentive to develp more. In terms of government policy the first question should be – where is the market failure?

@Zhou_enlai
The “heat pissing out” externality is not getting paid for. There are a variety of reasons, but let’s take one.

Much of the rental stock in the country is old (approx 30% of housing stock is not owner occupied).

There is no economic case for most renters to install low energy light bulbs, let alone to retrofit proper insulation on the building they are renting. Similarly, the landlord has a very weak business case to expend capital on insulation when they do not have to pay the operating costs incurred. Heat continues to piss out.

@Hugh Sheehy

There is a incentive for a renter to rent a better insulated house so heating costs will be less. Accordingly, there should be an incentive for a landlord to properly insulate a house. This is particularly the case where there is an over-supply of rental properties and landlords are anxiuus to hold on to tenants. Heating costs could typically amount to another month’s rent.

Any other examples?

@Hugh Sheehy

Of course, I left out the fact that there is a motivation for renters to turn off heat when it is not required as it is expensive. The externality of heat passing out is a part of the cost that is avoided by switching off. The more leaks out, the more heat you will need to purchase, the more expensive 30 mins of warmth will be, the more concious you will be about heating unnecessarily.

I found this article difficult to get a grip on. Maybe my own failing, but there was a lot of ‘on the one hand and on the other the bishop wears a ring’ about it. I couldn’t quite discern what the strategy is supposed to amount to.

Taken together with the John Gibbons’ column in the previous day’s Times, it’s hard not to suspect a current loss of nerve among environmental commentators in the wake of the Copenhagen failure. A fear that the public don’t rate global warming as much of a priority any more (at least not compared to the fallout from the economic crisis) is being supplemented with an even greater fear that the message of a warming planet is a hard sell to people whose lives are grinding to a halt in the grip of Arctic weather conditions.

It’s hardly the fault of the public if they fail to appreciate that any one extreme weather event is not related to climate change science when just about every extreme weather event over the past ten years has been jumped on, and reported, as evidence of the significance of ‘climate change’.

Why can’t we have a debate without this constant overlay of climate ideology? If we want to cash in on the forthcoming ‘green revolution’, wouldn’t it be better for us to examine options for growth, energy use, job creation arising from these technologies on their respective merits, pick off the ones that suit our particualr circumstances and discard the rest,instead of muddling our heads with lofty nonsense about ‘world leadership’ and ‘saving the planet’?

As for Richard Tol, he should take it as a compliment that he appears to be a bete noir for so many of these people.

Apologies in advance for my crankiness; ‘cabin fever’ is beginning to get to me.

@Zhou_enlai

The mechanisms you describe will indeed work, but VEEEERRYYY SLOOOWWWWLY.

Renters typically have a very short investment horizon, plus it’s unusual for renters to actually do any heating cost analysis unless a property is egregiously uninsulated. As for landlords, it’ll be a very slow process before landlords spend capital to insulate houses in the current rental market.

One of the other reasons that the externality is not being paid for is that there’s no charge for the externality of it. The cost of heating the outdoors isn’t an externality anyone makes you pay for….

If your house is badly insulated you pay for your own heat, plus all the waste, but noone comes along and charges you for heating the air above anyone else’s house.

Anyway, it’s a side issue. The main issue is questions like whether we can maintain post 1950’s lifestyles without use of Nuclear Power.

@ Veronica: ‘… examine options for growth, energy use, job creation arising from these technologies on their respective merits, pick off the ones that suit our particular circumstances and discard the rest, …’

I agree with you – mostly. Growth (as in Smithian variety) is over. OK, so we will get several years of a reprieve which will lull people into a false sense of security. This view is very unpalatable and will not be easily assimilated and accepted.

As for additional employment – very unlikely. Adaptable people with agricultural, engineering and technology skills will find work.

Alternative Energy: This is a very complex matter of physics and power engineering. The only real Litmus test of whether an alternative energy source (ie: non-fossil fuel) is any use is if the nett energy units output is significantly in excess of the energy units input for build-out, maintenance, repair, renewal and delivery. Note that the current bunch of Electron Snake Oil salesmen always appeal to our Elected Ones to support their particular brand. This gives the lie to their claims.

In any event, its not the money cost of alternative energy production, its the nett energy actually delivered to the consumer.

Empathize about the ‘cabin fever’. Am using the time to catch up on some missed out reading. Best regards.

B Peter

@Veronica,

“Why can’t we have a debate without this constant overlay of climate ideology?”

Absolutely, let’s. We do not need either wingnuts screaming “CRU-gate!”, or their counterparts attacking “rampant consumerism”.

The company I work for is researching smart-grids – using telecommunications to allow a consumer to use energy (say in their house)more efficiently. We are also developing tools to help product developers reduce carbon content. There may be other niches like these that could lead to more company start-ups. I would love to see it, but I do not see an Irish Nokia coming out of the move to Green.

Not sure if I would describe Copenhagen as a “failure” – more like a glass half full, in my view.

Firstly congrats to the site on being a good platform of debate on a range of issues that do not receive the required depth of analysis in the msm, NAMA being chief among these in recent times.

As someone involved in early stage wave energy R&D in Ireland I would have some points to make about this and other articles I have read recently on the subject of green technologies, chief of which is that I think that plain economics and the issue of unsustainable resource depletion is a stronger spur to drive the development of green technologies than climate change considerations and that these quite different things are often mixed up.

In terms of characterizing anthropogenic climate change I think that there has obviously been a rise in atmospheric CO2 concentration and that there is a long-term slow average warming trend in evidence but to a geologist this is only a small part of the greater story. For example the former sand dunes of the Permo-Triassic period found across Europe or the glacial tillites found as far south as the Azores or the numerous recorded several year dramatic weather changes linked to volcanic eruptions in the recent past point to powerful natural forces in operation. The pro-nuclear lobby have probably had a significant influence on the amount of air time given to climate change and a range of vested interests are now on that side of this issue including a whole phalanx of carbon-traders who view this area as a gold mine.

A rise in CO2 and other greenhouse gases such as methane may be a causal factor in our recent more extreme weather events which wreak havoc in our modern complex society but I think it is of more importance that the rate of our current resource use is unsustainable and all round natural wealth depletion is occurring. This ranges from the burning of anthracite and other fossil fuels formed over 10’s or 100’s of millions of years to widespread soil depletion and habitat and species loss.

My primary solution for remedying the situation is lifestyle change where we modify our philosophy a bit and do things a bit simpler but this is often portrayed as ‘reverting to the stone age’ which is a kind of knee-jerk over-reaction often used. The next solutions involve better overall planning and energy efficiency including the items mentioned in the article such as insulation etc.

We still however require electricity/power and in this context I would view those solutions which involve renewable fuels as being very worthwhile and would compare the economic case for all newcomers to hydropower which has been used for centuries and is recognized as the cheapest source of renewable energy. Specifically a recent installation like the Karahnjukar hydropower plant in Iceland is a good example of baseline cheap electricity and the cost to produce a kWh in this case is probably around €0.025, but obviously there are limited sites such as this. In terms of nuclear, I would be wary of the quoted low price per kWh that proponents have suggested often based on studies such as that of the 2004 Royal Academy of Engineers, as nuclear economics appears to be a bit if a black art involving many different elements .

In terms of wave energy I have seen Richard Tol on TV recently together with William Dick of Wavebob and I felt he was unduly negative in his approach to this area and he describes it above as a very long shot. These are strong words and as someone who thinks there’s about a 70% chance that wave energy will deliver electricity eventually at a rate of €0.08 per kWh (think of your current €0.14 or so Electricity bills) or less, I would consider government money spent on research in this area appropriate given we have one of the best wave climates worldwide. Remember that the initial figures are not all that big €100’s of k to get to the stage where you can attract significant venture capital and this rises to several million to develop ocean based prototypes. This is small beer in comparison to the billions dedicated to bank bailouts which is essentially dead money.

There has and will obviously be setbacks in the development of wave energy but there are very few modern industries that did not have a long trial and error period. Developing wave energy utilizes a range of different approaches developed in other sectors and if nothing else I think this crossover will lead to some useful technologies with widespread use being developed in the course of the research being carried out that will in turn be widely applicable in other sectors.

This is only a small part of the overall issue and I have not mentioned wind or solar which are playing a major role and will continue to do so…

sorry if post is too long

The pro-nuclear lobby have probably had a significant influence on the amount of air time given to climate change and a range of vested interests are now on that side of this issue including a whole phalanx of carbon-traders who view this area as a gold mine.

The “pro-nuclear lobby” work has been rather sparse of late, as Veronica McDermott above (late of being the former BNFL’s lobbyist here in Ireland) could tell you. If, however, you do have proof of how the climate change issue is a creation of the nuclear lobby, then I think you need to share.

As to the “phalanx of carbon-traders”, this i what you get from the market-driven approach.

I note that while you’ve sounded of on various no-doubt-fascinating geological features, you’ve refrained from joining the crankery that makes up the so-called ‘debate’ – is this a true representation of your position? (and Veronica, please learn the simple difference between weather and climate. Thank you)

Two comments: Don’t believe everything that Bjorn Lomborg says about me.

There’s an interesting question here which I don’t see an answer to: what, exactly, has Lomborg said about you that we’re not to believe?

Just noted on the BBC 10 o’clock news: UK plan to install 6,000 wind turbines offshore which will supply electricity to 17 million homes & create 70,000 jobs (according to Ed Milliband). Any of those contracts or jobs coming here? By “offshore” they mean “far offshore”, like the middle of the North Sea & the Irish Sea.

“The pro-nuclear lobby have probably had a significant influence on the amount of air time given to climate change ”

In fairness, it is more like the more pessimistic of the climate change scientists (such as Lovelock and Hansen) looking round in desperation for a quick fix as they see time running out.

There are a lot of comments in the article which on the face of it, could be good ideas. But if there is one thing I have learnt from reading the likes of Richard Tol and Colm McCarthy (and Nordhaus), it is that solutions to problems like AGW should be left, as far as possible, to the market and it’s individual actors rather than central planners.

For example, if retrofitting houses is a good idea, why subsidize it? If it makes sense to take old cars of the road, why fund this centrally?

If AGW is a problem, quantify it, then tax it (CO2) and then let the market work out the optimal response because let’s face it, when were central planners ever better, in the long run, than ordinary individuals when it comes to choosing how best to allocate goods and services.

If oil is becoming scarce then then this will be signalled via prices. Are ordinary consumers/producers incapable of recognizing a price signal and reacting by changing fuels or investing in developing alternatives?

AGW it would seem is being used as just another excuse to increase the amount of govt intervention in our lives to no good effect.

One final point on the article. It states than flooding would reduce the fertility of the soil. So would droughts. But if govts funded farming less the cost on agriculture would also fall.

when were central planners ever better, in the long run, than ordinary individuals when it comes to choosing how best to allocate goods and services.

Seat belts. Now, go away and Google it.

Meagre article spawns interesting debate.

Ireland will not be contributing a great deal anytime soon to new technologies in the Green arena. As has been said, resources do not exist to spark innovative activity. Two questions. Whos resources? And, which technologies?

The Spanish blew a fortune on a Green Bubble last year. E766k per job created. 2.2 jobs lost for each “Green” job created.

We can achieve massive efficiencies if we really want to. Adopt forthwith a NUCLEAR POWER GENERATION PROGRAM.

Five new plants and we are independent of OIL. Ireland would lead the world in CO2 reduction. We might be able to look at electric vehicles. We would certainly be closer to a position were we could export excess output.

For what we are about to commit to NAMA in an absolutely criminal scam we could instead be free of oil. That is the contribution little Ireland could make to the world.

Why are the Greens not advocating a migration to Nuclear? Because they are a cult and their dogma forbids it.

@EWI

No I think it was Volvo which popularized seat-belts. And it was an innovation which helped them hugely in growing their business worldwide. Competitors desperately playing catch-up.

No I think it was Volvo which popularized seat-belts. And it was an innovation which helped them hugely in growing their business worldwide. Competitors desperately playing catch-up.

The case in mind was the US, where the lobbying by car manufacturers around this (and that of airbags, a related issue) has something to behold, and progress relies on government intervention.

Why are the Greens not advocating a migration to Nuclear? Because they are a cult and their dogma forbids it.

I think that you need to re-visit that assumption. The two concerns don’t necessarily overlap, not even in the green movement.

And any talk of “cults” around AGW needs to bring in those members of the economics profession who are grasping at some pretty desperate straws to ‘prove’ that it isn’t happening, or to try to con the public as to the seriousness of it.

I think everyone would be happy to leave AGW to the markets, if we had the necessary faith that it would lead to the right outcome.

Given the lessons of the past ten years, unregulated markets tend to lead to monopolies, insider manipluation, and rent-seeking. What is “free” about banks that so dominant that the state has to subsidise them so that they do not fail? Not only that, but they can shamelessly spend the subsidy on giving themselves bonuses and inflated salaries.”Free Market” is often just shorthand for control of the economy by the wealthiest.

The opposite view is that countermeasures to ADW is very much like a war or emergency situation. In such cases, control must be centralised to a great extent to minimise large-scale disasters. An army does not rely on the markets to tell it if it needs to advance or retreat. I exaggerate of course – probably we must steer a balanced course & ideologues of command economies or free markets are to be equally shunned.

Few comments.

1. Which is of more pressing concern – global warming and climate change, or energy security? I’d vote for the latter. Loss of an energy supply, even for a few hours, can cause havoc – we are 101% dependent upon a reliable and affordable supply of energy (ie. transport fuels and electricity).

2. The idea that ‘the market’ will deal with any difficulties arising from an energy supply shortage is too ludicrous for words. When I read comments about ‘markets’ I wonder if the authors have a proper knowledge and understanding of this virtual construct.

3. There are two key tasks that have to be embarked upon, (a) a significant and sustained energy conservation programme, and (b) an extension and upgrading (electrification) of our rail network. The first is virtually costless: you curtail some of your own surplus to needs domestic usage. The second has almost no political support – yet!

B Peter

@Mokabaybob
“No I think it was Volvo which popularized seat-belts.”
Google a bit more.

Not that I agree that the idea that one case proves the reliability of central planning, but not everything can be left to the market. However, the taxing of CO2 either through tax on use or tax on imports from areas that do not tax its use (to keep a level trade field and stop export of pollution) would seem to cover it.

@Yoganmahew
Rewatching the start and end of the recent Prime Time programme featuring John Gormley provides a valuable insight into green startegy.
For those looking for the short version go to 3mins 30 Secs in.

@EWI

Sorry if i came across as sounding off but I think the whole climate change debate has become a bit of a charade in recent times with two strong groups forming at each polar end. My opening few paragraphs were like a declaration of interest and you could sum it up by saying I think climate change is a grey area and not necessarily the biggest spur to my green thinking. Before people get too highly opinionated they should be aware of the science behind understanding climate change and this includes evidence from recorded history, palaeobotany, ice-cores, speleothems, sedimentology etc. as well as ocean/atmospheric physics and chemistry.

Maybe it has coloured my thinking but I am fresh from reading the recommended hard-hitting ‘Gomorrah’ by Roberto Saviano which provides an insight into aspects of the southern Italian economy and in this region I would think that climate change worries play second fiddle to the serious soil contamination problem from illegal dumps which the local farmers are coming to realise is affecting the reputation of the mozzarella and other foods that they produce. Not forgetting that Vesuvius is also alongside and overdue an eruption.

I have not received a response from Richard Tol as to why exactly he sees wave energy as a ‘very long shot’ which is something I think he should elaborate on given that his role in the ESRI is a very public one. In terms of his and others discussion of the role of government in developing technologies I have a viewpoint that I would like to get their feedback on.

Holland suffered devastating North Sea flooding in 1953 and in the next few decades a major government-funded effort to protect the coastline was instigated with the high point being the building of the huge Oosterschelde movable barrier (National Geographic October 1986) which gave Dutch offshore contractors a major leg up and was a playground for innovation in this field with lots of new design vessels such as the Cardium, Mytilus and Ostrea. There was lots of objection to the very high costs at the time but given that Dutch offshore contractors such as Van Oord are omnipresent in projects around the world since then (Dubai Palm, Ras Laffan, Chennai Port, Malampaya platform, Jack Lynch Tunnel etc. etc.) is there a connection? and has there been a far greater return to the country on the moneys originally put up by the Dutch Government?

@Tim
Sorry for not answering the question. I made the same points at a number of occasions, but here we go again.

Wave energy is far less developed and far more expensive than other forms of renewable energy (which can barely compete with fossil fuels). There is no reason to assume that technological progress in wave energy will be particularly rapid, or faster than its competitors.

Ireland does not have a track record in the skills (materials science, mechanical engineering, etc) needed to make wave energy a success.

The Irish wave energy research budget is tiny; and Irish wave energy companies are small. If an Irish-based researcher comes up with a break-through in wave power, the patent / company / person will be snapped up by a foreign competitor.

There are highly paid jobs in research and development, but not in manufacturing wave power devices. Such devices are so heavy that they will be made on the spot, rather than build in Ireland and shipped to their destination.

Wave energy, if it comes to fruition, would be deployed in Ireland; but the technology would most likely not be owned by an Irish company; it would create few jobs; and probably require substantial subsidies for a long time.

@ Richard

In reply to your points

You say: “Wave energy is far less developed and far more expensive than other forms of renewable energy (which can barely compete with fossil fuels). There is no reason to assume that technological progress in wave energy will be particularly rapid, or faster than its competitors”.

Yes it is frontier research with risk attached but your point on it being far more expensive than other forms of RE is premature. The only published costings are based on one-of-a-kind early prototypes and this is hardly a guide to the optimum eventual solutions. I take your point about the length of time required and I believe Vattenfall have a roughly 10 year timespan to full commercialisation in the sector but it is not unlikely in my opinion that we have
competitive proven technology within the next 5 years. The resource availability of wave is sufficiently different from wind to differentiate it and so if the price is right this will not be an issue. With regards to fossil fuel competitiveness this is a moving target and are you willing to give a predicted price per kWh for gas generation in 2025?

You say: “Ireland does not have a track record in the skills (materials science, mechanical engineering, etc) needed to make wave energy a success”.

Broad statement with some truth in it but plenty of bright engineers and innovative companies in Ireland and if the phased prototype work produces the desired figures then these will be attracted.

You say: “The Irish wave energy research budget is tiny; and Irish wave energy companies are small. If an Irish-based researcher comes up with a break-through in wave power, the patent / company / person will be snapped up by a foreign competitor”.

Another fairly broad statement with limited relevance. Even if this did happen it is still likely that the devices might be tested and/or deployed offshore Ireland because that is where the waves are. If this is the case, whatever way you look at it local jobs would be created. There are about 5 stages to developing wave energy devices and the government funding for Irish-based companies is associated with the required level for each. If the numbers look good from the preceding stage then the funding should grow, it is calculated risk.

You say: “There are highly paid jobs in research and development, but not in manufacturing wave power devices. Such devices are so heavy that they will be made on the spot, rather than build in Ireland and shipped to their destination”.

If you look at the large oil platform structures/floating caissons/or concrete barges that are towed half-way around the world this observation does not seem relevant. Where did the Beckett Bridge come from?

You say: “Wave energy, if it comes to fruition, would be deployed in Ireland; but the technology would most likely not be owned by an Irish company; it would create few jobs; and probably require substantial subsidies for a long time”.

This is a possibility but why should it only create few jobs and what about the role the Dutch Government played in their offshore contractor sector?

All in all I accept your scepticism but I still believe that ‘very long shot’ are strong words and not appropriate.

@Tim
If you multiply all your “ifs”, the result is “a very long shot”: P(wave power will be competitive) x P(wave technology will be owned by an Irish company) x P(wave power will pay high wages to many people in Ireland) = very small.

Your characterisation of the Dutch water industry is wrong. The Dutch have been exporting such technology since the 13th century.

@Richard

What kind of a response is that – “If you multiply all your ifs the result is a very long shot”? – not very scientific in my opinion

And is that your only response to the international rise to prominence of the Dutch offshore sector? – that it has been exporting since the 13th century – how about its major government-funded shot in the arm in the 20th century?

@Tim
Recall that is a blog. It is not a private tutorial.

The Dutch water industry, offshore, near shore, and onshore, rose to international prominence long before there was a central government in the Netherlands. Therefore, the Dutch government cannot have been the cause.

You identify a number of conditions that need to met to make Irish wave power a success. Even if you optimistically assign a 10% probability to each, then you still have an 0.1% overall probability. That’s a long shot.

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