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Introducing the

Tumbesian ecosystems of Northwest Peru


Conservation International Hotspot #4

600,000 344 21 %
ACRES mammal types ANNUAL LOSS
projected projected
NATURE
& $1.04M
NORTHWEST PERU PROJECT
NATURE & CULTURE /SOUTH AMERICA
CULTURE ANTICIPATED 30-MONTH DEPLOYMENT
TARGET
ACRES FOR
CONSERVATION: 600,000
This summary, which contains brief, selected information pertaining to the business and af-
fairs of the Project, has been prepared by NATURE & CULTURE to provide general information
about the offering. This is not an offer to sell, or a solicitation of an offer to buy land, as such
an offer or solicitation can only come through the offering’s Conservation Memorandum
(“CM”) . This material cannot, and does not, replace the CM, and the CM supersedes this
material in all respects.
THE OPPORTUNITY IN 103 WORDS

To save humanity, you have to tackle some really nasty problems. You
already know about them: climate change, clean energy, and species loss.
To us, the problem of species loss stands out. Why?
Because it’s irreversible.
Areas where there is high species concentration have become exceedingly rare and
valuable—out of 192 countries, only 17 make the watch list. None are in Europe. The
U.S. is one. The remaining 15 are in South America, Central America, Africa, and Asia.

All are at risk. But many are difficult to reach. Others are dangerous to operate in
once you reach them. Some are prohibitively expensive to deal with. Several are
targeted by other organizations.

But, there are 4 countries with areas of biodiversity wealth and species
concentration that we have identified as reachable, affordable and saveable. Our
immediate focus is to defend these areas.

This prospectus describes one of our priorities, how we selected it, why it must be
defended, and what it costs to do so.
NATURE
CULTURE & PROJECT
NW PERU:
THE TUMBESIAN ECOSYSTEMS SUMMARY
KEY INVESTMENT MERITS projected

ACRES 600,000
FUNDING REQUIREMENT $1,045,000
COST PER ACRE CONSERVED $1.74
DEPLOYMENT SCHEDULE 36 MONTHS
HABITAT TYPES 5
CONSERVATION INTL. RANK HOTSPOT #4
NCI LEAD OFFICE PIURA, PERU

The project costs and cost-per-acre are based on specific assumptions in


the Project Memorandom of the Fund (the “PM”) including the projected
time line and use of funds.

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NATURE
CULTURE & THE OPPORTUNITY THE MODEL THE REGION NCI TEAM
NW PERU: DRY FOREST PROJECT
Projections based on the Private Placement Memorandum for the offering.

600K 83 95%
ACRES MAMMALS CLEARED
The Advisor and Manager project NCI targets loans that can be The NCI Series One portfolio is
that the invested capital will be acquired at 30%, or greater, projecting a 14% IRR over a 36
returned in Year 2 of the hold discount to current market value month hold period.
period. of the collateral.

INTRODUCTION THE PROBLEM SOLUTION HOW IT’S DONE THE SITE WHY US
THE PROBLEM: IT’S NOT WHAT YOU THINK THE TUMBESIAN ECOSYSTEMS america
south
Nearly everyone who studies conservation—or watches CNN—is already aware that AREA OF INTEREST: 600,000 ACRES
bulldozers and logging machines are clearing some of the world’s most valuable habitats.

Clearing and logging have reduced some of Peru’s forests to only a few percent of their original
extent. Unless this is your first day in the conservation business, you already know about this.
And because of general awareness, progress is being made:
Protection efforts have started in many of Peru’s high profile habitats. There are 56 conservation
zones in the country, covering almost 13% of the landmass. That’s the good news.
But—some of Peru’s most biodiverse areas are so remote, they aren’t even acknowledged as
habitats that need protection. That’s a serious problem.
In Peru, large and remote areas where logging, overgrazing, and corn fields have replaced 95%
of biodiverse habitats,the lack of management (and community involvement) means that the
process of species extinction is occurring and accelerating.

Current gobla data on habitat loss and species extinction.


There are severe threats to the natural habitats of The Tumbesian Ecosystems that include forest
conversion, the overexploitation of land and pollution sources such as mining, fish processing
plants and petroleum extraction. Other regions of the world are suffering similar fates as seen in Overgrazing is a severe problem in the remaining natural
areas and sustainable management techniques are
the global data on species that are threatened with extinction. needed in nearly all local communities. Other threats
A m p hib ia n include the weak government policies for resource
a n gered Spe management in this ecosystem, the lack of knowledge
e re d M a m m nd c of the benefits of environmental services and products,
n g al S the lack of conservation programs, and the lack of

ie s
E

a p
nd conservation education for the owners of communal and
e ci
E

private lands.
es

re d P l a n t e re d B i r d S
nge ang
22% 32%
Sp e

pec
a

End
End

c ie s

ies

12% 13%
of 285,000 of 9,895 of 5,490 of 6,347
plant species bird species mammal species amphibian species
in the world, in the world, in the world, in the world,
33,798 are 1,240 are 1,208 are 2,031 are
NATURE
threatened. threatened threatened threatened
CULTURE &
THE OPPORTUNITY THE MODEL THE REGION NCI TEAM
THE SOLUTION: DO MORE FASTER AND CHEAPER NATURE CULTURE
WE’D LOVE TO TELL YOU THAT OUR EFFORTS WILL SAVE THE SNOW LEOPARD, POLAR BEAR
AND EVEN THE BLUEFIN TUNA. But lets get real. That might cost billions of dollars which is
above our pay grade. We’re field scientists who work away from the limelight and we focus
$2 per acre
on just one thing: how to use known science, education, and political persuasion to protect
biodiverse habitats from logging and clearing.

For organizations that offer funds to protect the


environment, and who feel there isn’t enough cost THE 17 MOST BIODIVERSE COUNTRIES (2011)
efficiency and results for their conservation dollar,
Nature & Culture’s NW Peru Project is a way to get
maximum bang-for-the-buck.
We prevent species extinction in the most biodiverse
areas in the world for about $2 an acre (If you just
bought the land, it could cost you up to $300 an acre.)
Unlike other conservation organizations—or corporate
green projects which provide expensive awareness
programs—NCI is operational: more than 90% of the
capital we raise puts boots on the ground in areas that
face immediate danger of species extinction. We efficiently safeguard many of Latin America’s remaining
And its done in a way that is measured, recorded and ecosystems by providing financial resources and trusted
guidance to a wide array of local conservationists,
reported. biologists, and their communities.
NCI can do this by putting resources and science into the
hands of Peru’s local conservationists and biologists. We
also help policy makers that are already motivated to
protect these areas.
The projects we support are in the rain forests, cloud
forests, dry forests, and estuaries of Latin America, but
they are always initiated through our relationships with
resident conservationists and conducted in concert with
local mayors, politicians, NGOs, and community leaders.
Our strategy unites nature with culture.

NATURE
CULTURE &
THE OPPORTUNITY THE MODEL THE REGION NCI TEAM
THE NATURE & CULTURE MODEL NATURE
CULTURE &
If we just buy the land without the support of the people who live there, then you
can guess the outcome: the conservation effort will be temporary. There’s only
one business model that we know of which will protect the land for generations.

To get any government to declare 600,000 acres as 1 IDENTIFY 2 DOCUMENT


DOCUMENT 3 DOCUMENT
FUND 4 DOCUMENT
PROTECT
a Regional Protected Area, you have to do some
specific things: THE FIELD SCIENTISTS AT NATURE & CULTURE HAVE A JOYLESS TASK: Find
and catalog the most exotic ecosystems in the world—the ones that are
about to be wiped out.
r GOOD FIELD FIRST, you have to provide a project
binder and it can’t be scientifically
SCIENCE arcane. It has to be accessible to From this list, we are faced with painful choices. We cannot be
governmental officials and locals.
everywhere at once, so we have to prioritize:

r ACHIEVE NEXT, you have to build a groundswell


of interest. Beyond the professionals,
Our purpose is to protect habitats where species extinction is imminent.
CRITICAL MASS The People have to care.
Northwest Peru: The Tumbesian Ecosystems
To prevent deforestation and clearing of this habitat, we have to get the
r GOVERNMENT THEN, you have to get the
government to approve your project government of Peru to declare it as a Regional Protected Area.
SIGN-OFF and make a Declaration of Protection.
If you haven’t done this before—the learning curve is steep. But we’ve
been doing it since 1997. Not only do we get it done, but we can do it for
r IMPLEMENTATION ONLY THEN, can you go to the
subject site and begin conservation approximately $2 an acre.
and protection.

Nature and Culture’s staff and partners have previously protected


5,000,000 acres of biodiverse ecosystems in Latin America.

THE OPPORTUNITY THE MODEL THE REGION NCI TEAM


Epipedobates is dismissed by most because it’s so tiny,
yet it contains a potent toxin that is also a powerful pain
killer—200 times more powerful than morphine. This is a
social animal, living in groups of up to eight individuals.

PERU CONSERVATION CONTAINS RESERVES

13% 56 10% 2.2%


OF LAND IS IN
CONSERVATION UNITS
DEDICATED
CONSERVATION AREAS
OF ALL PLANT &
ANIMAL SPECIES
NATIONAL RESERVE
AREAS
(BY LAND MASS)
TECHNICALLY, WHAT IS BIODIVERSITY? EXTINCTION RATES ABOVE EXPECTED

ESTIMATED EXTINCT SPECIES BY 2050


1000X
30%
The term pretty much defines itself, and you don’t need a biology degree to “get it”: OF ALL KNOWN
Biodiversity is the variation of life forms within an ecosystem or habitat. The field
scientists at Nature & Culture believe it is a measure of the health of ecosystems.
EST. TIME FOR VERTEBRATE RECOVERY
30
MILLION YEARS

//by BYRON SWIFT//

2 3
Since life began on Earth, five major Biodiversity supports ecosystem
mass extinctions and several minor services including air quality, climate
events have led to large and sudden (e.g., CO2 sequestration), water We take, but we
We are taking the
drops in biodiversity. The Permian– purification, pollination, and erosion land that plants and
don’t give back

1
Triassic extinction event, 251 million prevention. animals rely on

4
years ago, was the worst; vertebrate Biodiversity gives rise to many
recovery took 30 million years. The ecosystem services that are often We’re losing species
most recent, the Cretaceous–Tertiary not readily visible. It plays a part irrecoverably This is an imbalance and
extinction event, occurred 65 million in regulating the chemistry of our it’s not sustainable
years ago—this is the one that killed atmosphere and water supply.
the dinosaurs. Biodiversity is directly involved in
But since the dinosaurs, species loss water purification, recycling nutrients
has now accelerated above any prior and providing fertile soils. THERE ARE SOME PROBLEMS THAT ARE FIXABLE. THIS IS ONE.
rate, and its driven by human activity. Experiments with controlled The power of evolution drives the origin of species to produce a a living legacy that is our responsibility to
Estimates of species loss are at a rate environments have shown that
protect at this historic crossroads. The magnitude of the threat to biodiversity is enormous.
1,000 to 10,000 times as fast as is humans cannot easily build We have taken over and converted most of the productive lands and forests, poisoned or drained innumer-
typical in the fossil record. able wetlands, over-fished the oceans, and altered the atmosphere. One in three amphibians, one in four
ecosystems to support human needs; mammals, and one in eight birds are currently facing extinction. Some of the habitats that support biodi-
The period since the emergence of for example insect pollination cannot versity are down to their last remnants.
humans has displayed an ongoing be mimicked, and that activity alone This data should prompt all of us to take seriously the need to study and defend biodiversity. With the cor-
biodiversity reduction and an represents tens of billions of dollars rect action taken now, it is still possible to save most of the diverse forms of life on our planet.
accompanying loss of genetic in ecosystem services per year to
diversity. Named the Holocene humankind.
extinction, the reduction is caused For these reasons, the United Nations
primarily by human impacts, designated 2010 as the International
particularly habitat destruction. Year of Biodiversity
Biodiversity’s impact on human
health is also a major international
issue..

THE OPPORTUNITY THE MODEL THE REGION NCI TEAM


NATURE
&
PROFORMA CULTURE

OBJECTIVE: CONSERVATION OF 600,000 ACRES


NCI provides services to the
project on an at-cost basis

36months
PROJECTED without markup, or through
PROJECT LEVEL PROFORMA DEVELOPMENT PERIOD
unaffiliated 3rd parties.

It is generally assumed that


administrative expenses are 10%
Year 1 Year 2 Year 3 annually.

It is further assumed that carbon stock


analysis is $15,000 each year of the
Capital from fund raising 1,045,000 - - program.
Addional capital sources - - -
The proforma assumes no expenses for
Total capital available for project 1,045,000 - - management at the NCI executive level.

The proforma projects that the Investor


Operang Expenses: will benefit from conservation of
Development 200,000 200,000 200,000 land in the subject area at the rate of
approximately $1.74 per acre.
Management 135,000 135,000 135,000
Total expenses 335,000 335,000 335,000

Capital remaining for operaons 710,000 375,000 40,000

PROJECT IMPLEMENTATION SCHEDULE Management


Conservation
Projected Development Period 12 quarters (3 years)
Activity Q1 Q2 Q3 Q4 Q5 Q6 Q7 Q8 Q9 Q10 Q11 Q12
Prepare Management Plans
Capacity Building
Establish Community Management
Sustainable Development Projects
Monitoring and Policy Development
Conservation Education
Carbon Stock Analysis
Reports
THE CRITICAL SKILLSET
There’s no more simple truth in the conservation business: If the locals don’t benefit from
your environmental protection program -now and in the future - then the program won’t
last beyond the current generation.
Actions for Conservation Success

Nothing is more important to us than building past guards and any type of fencing to exploit
strong relationships with the people who the natural resources.
live near our programs. And not just strong So if you take away the fences and the guards
relationships, but unshakable ones. Deploy
and the patrols - your remaining option is to
Talent
Because as build social programs
conservationists we have
protected more than five
SCIENCE NATURE that naturally protect the
environment.
Know the
Community
Map
Region
million acres of biodiverse
habitat and we know over CULTURE INVESTMENT Social programs? Again,
you cannot sell anyone
time, the boundaries of on the value of biodiverse
each habitat will be tested habitats - people need to arrive at this
by policy makers, industrialists and military Determine Assess
conclusion on their own, especially nationalistic Species
groups. and hard-headed governments. Cost
And since we never build fences or physical What you can do is build relationships with Ensure
boundaries, it’s only the strength of the human politicians, regional authorities and local people. Permanence
heart that can protect habitat in the long term. That’s what we do.
This brings us to the central idea of our programs Our relationships lead to trust, allowing us
and certainly what must be the most important to show people their own habitats through a
lesson of the biodiversity crises: Putting up conservation lens.
fences is a short-term fix that will fail in the
long-term. The key risk to “fencing,” as it is Trusted relationships are NCI’s critical skillset.
known, is that the people who live in-and-near This is how we gain the opportunity to
our projects will come to feel restricted from permanently conserve large areas.
using their own lands. They will eventually slip

NATURE
CULTURE & THE OPPORTUNITY THE MODEL THE REGION NCI TEAM
SELECTING A SITE: OUR APPROACH NATURE
CULTURE &
SCREENING A POTENTIAL SITE
with NATURE & CULTURE
b We don’t rely on single sources to determine the priority level of a site.
Here’s how NCI analyzes a living asset prior to investment:

1
When we first consider a project, we look for a size
SIZE OF that’s in our sweet spot of 100,000 to 1 million acres.
POTENTIAL We like to work on big projects and important projects—
SITE but we don’t want to overreach.

2
Next, we use in-country biologists to assess species
diversity and endemism—the number of plants and
DIVERSITY & animals that are unique to the region. Endemism is the
“ENDEMISM” most critical element to look for because it is at the
heart of biodiversity.

3
A trend analysis looks at the imminent dangers that are
moving towards the region. These might be logging,
IMMINENT slash and burn pasturage, biofuel plantations, overgraz-
THREATS ing, oil extraction, or mining. We go to where the threats
are imminent.

4
The only way to protect land for less than $100 an acre
COST is to work with mayors, governors, and community
leaders in order to set up community reserves,
ANALYSIS protected reserves, and zoning regulations. This factors
into our accounting. If we can’t meet our cost targets,
we know the project isn’t right for us.

5
The time, energy and resources devoted to a project
STAYING only make sense if the land can be protected in perpe-
POWER tuity. The overarching goal is to create a legacy for the
people and organisms involved. We look for projects
that will provide a legacy for future generations.

6
We can’t succeed on our own, and we know we need
LOCAL local conservationists with political talent to match their
TALENT biology training. We like to find conservationists who will
eventuallymove into government service—where they
can bring us greater levels of support over time.

THE OPPORTUNITY THE MODEL THE REGION NCI TEAM


ECOSYSTEM DETAIL: Coastal Habitats
The coastal waters are part of the Peruvian Current Large Marine Ecosystem (LME) which is considered a
Class I, highly productive ecosystem. The Peruvian and Humboldt’s high rates of primary and secondary
productivity support the world’s largest fisheries, accounting for nearly 20% of the world’s fish catch.

Foca Island (1,000 acres) Virrila Estuary and Ramon and Ñapique La- AREA OF DETAIL
We have an opportunity to declare the first goons (125,000 acres)
marine protected area in Peru at Foca Island. It This Peruvian coastal site harbors large
is the northernmost island of Peru and is unique numbers of migratory waterfowl. It is an
because it includes both important breeding
tropical and cold water SAN PEDRO site for the charismatic
FOCA ISLAND MANGROVES
Foca Island
.
Piura
marine species. The 1,000 ACRES 20,500 ACRES
Chilean Flamingo and
San Pedro Mangroves
proposed conservation the rare Peruvian Tern
area (including the VIRRILA ESTUARY ILLESCAS is also found here.
Ramon & Ñapique Lagoons
and Virrila Estuary
surrounding marine area) RAMON&NAPIQUE LAGOONS PENNINSULA Adjacent sea-grass Illescas Forests North Western Peru is bounded
125,000 ACRES 175,000 ACRES on three sides by a triangle and a
contains the northernmost (Caulerpa filiformis) large box of bananasa

breeding population of habitat is home to the


the endangered Humboldt Penguin and Pacific Seahorse (Hippocampus ingens) and is
These areas will protect three types of wetlands - estuaries,
other endemic seabird species. It also has a feeding site for green sea turtles (Chelonia lagoons and mangroves . They are especially important for their
a small breeding colony of fur seals that are mydas agassizzi). unique endemic species, habitat type, marine diversity and im-
possible hybrids with Galapagos Fur Seals. Its portance for birds. The region’s fresh water rivers flow from the
underwater diversity includes 54 fish species, Illescas Peninsula (175,000 acres)
high Andes through the tropical dry forest to the Pacific Ocean
50 invertebrate species and significant fields Illescas Peninsula is characterized by rocky providing fresh water to the ecosystems in between.
of gorgonian corals that are endemic. hills, sand dunes, dry forest patches and is a
remnant of the formerly isolated Cordillera de
San Pedro Mangroves (20,500 acres) la Costa; combined with the marine coastal
These mangroves provide an important habitat strand, it exhibits a tremendous abundance
to migrating birds and the endemic Sechura and diversity of life. It is one of the few places
Fox. San Pedro is a Birdlife Important Bird where the endangered giant Andean Condors
Area, providing critical habitat for the Peruvian feed and reproduce Vand is the only site
Plantcutter and the Peruvian Tern. This wetland where the rare Illescas Gecko is found. NCI is
site is listed under the Ramsar Convention for also proposing that a marine extension to the
Wetland protection, and includes 1,000 acres peninsula be included in a new protected area
of mangroves and 20,500 acres of wetlands that was originally proposed in the 1990’s.
and riparian habitat. The mangroves protect
over 200 fish species, some of commercial
importance, to the Peruvian fishing industry.
THE OPPORTUNITY THE MODEL THE REGION NCI TEAM
south
THE TUMBESIAN ECOSYSTEMS america
AREA OF INTEREST: 600,000 ACRES

JAGUAR
15K
WORLD POP.
estimated
ECOSYSTEM DETAIL: Tropical Dry Forests
Northwestern Peru is a nexus where five distinct habitat types converge: tropical dry forest, tropical deserts,
wetlands, riparian areas, intertidal-coastal areas and ocean. Here the cold Humboldt Current and warm Panama
ocean currents create a unique, transitional area exhibiting tremendous marine and terrestrial diversity. This di-
verse combination of habitats provides some of the highest rates of biodiversity in a small area.

Angostura (20,000 acres) laden dry tropical forest in the foothills adjacent
This area expands the Amotape Foothills to the Cerros de Amotape National Park. It
AREA OF DETAIL
National Park and contains rare transitional would also create an area to conserving one
habitats between the dry tropical forest and of the largest populations of the endangered
the humid Equatorial Pacific Forest. There Peruvian Plantcutter (Phytotoma raimondii) in Angostura
are significant breeding populations of the the arid plains at Talara. Talara encompasses
Coto de Caza
endangered Grey Hawk and new amphibian the largest and most intact area of sparse dry
species have been found here. The national forest in northwestern Peru—an ecosystem Amotape
park service and NCI have already constructed that has been virtually destroyed. The area is
a field research station/operations center heavily overgrazed and without management Salitral .Piura
here for management and research. so conservation effort is badly needed to first
protect and then restore this area.
Coto de Caza El Angolo (50,000 acres)
NCI is currently seeking a management Salitral (125,000 acres)
concession from the Peruvian ministry of the Salitral is the northern boundary of the
environment to manage at least 50,000 acres species-rich tropical dry forest conservation
The dry tropical forests of this region, together with those of
at the Angolo Hunting Reserve (Coto de Caza) along the slopes of the western Andean
adjacent Ecuador, are known as the Tumbesian Region of Ende-
in an effort to conserve this national protected foothills. This proposed protected area
mism (135,000 km2) and are one of the worlds highest biodi-
area’s tropical dry forests. This area is the contains 70% of the habitat of the critically versity priorities due to species endemism and degree of threat.
second largest protected dry tropical forest endangered White-winged Guan (Penelope
in Peru and along with the adjacent Cerros de albipennis) and contains approximately 80%
Amotape National Park, it contains the highest of Peru’s wild population of this species.
number of globally threatened bird species The area has been prioritized as an Area of
(9) of any reserve in Peru. This unmanaged Importance for the Conservation of Birds (IBA)
area is currently threatened with overgrazing, by Birdlife International. Site management will
woodcutting and mining. include building fences at critical points of
access for livestock, building an educational
Amotape Foothills—Talara (60,000 acres) center focused on the White-Winged Guan, the
This proposal would protect an additional Spectacled Bear and their habitat needs and
60,000 acres of endangered and species- establishing a local management committee.

THE OPPORTUNITY THE MODEL THE REGION NCI TEAM


NW PERU: FIVE DISTINCT HABITATS 2011
Northwestern Peru is a nexus where five distinct
habitat types converge: Tropical deciduous forests,
mangroves, estuaries, intertidal zones, and marine
ecosystem.

Gray and Gold Warbler: one of the


endemics of the Tumbesian coastal
dry forest ecosystem in NW Peru.
OUR TEAM NATURE
CULTURE &
WE KNOW LATIN AMERICA. WE’VE INVESTED, ACQUIRED, MANAGED AND PROTECTED 5,000,000 acres of
biodiverse habitat in four countries: Peru, Ecuador, Columbia, and Mexico.

Byron Swift, President Ivan Gayler, Chair Luis Alban, Director of Nature & Culture-Peru
Byron has worked with local partners Ivan is the founding President and Chairman Luis initiated our Peru office in 2003. He is a
throughout Latin America for over two of the Board of Nature and Culture Interna- Biologist (University Ricardo Palma of Lima),
decades to improve land and resource tional. Since 1997, NCI has lead and supported with twelve years experience in projects
conservation and environmental policy. An efforts to establish millions acres of tropical dealing with conservation and development,
environmental lawyer, Byron is an expert in forest reserves in Ecuador, Peru, Columbia, and especially in relation to forest genetic re-
private lands conservation and has published Mexico; including the creation of a 2.5 million sources. Luis served as scientific director for
widely on biodiversity, industrial pollution and acre UNESCO recognized Biosphere Reserve in reforestation at the University of Piura (1994-
climate change. He has directed the energy the tropical Andes, 4.5 million acres of Regional 2004), President of the Regional Environ-
program at the Environmental Law Institute Reserves in the Amazon rainforests, and over mental Commission of Piura (2002-2004),
(1994-2004) and the US office of IUCN - 100,000 acres of tropical dry forest including and Coordinator of the Piura working group
World Conservation Union (1998-2004), and 20,000 acres in Sonora, Mexico. on paramos (2001-2004).
has served as a private foundation officer. Ivan has served as President and Board Mem-
ber of the San Diego Museum of Man, a Board
Member of the La Jolla Playhouse, and a
Member of the Director’s Cabinet of Scripps
Institution of Oceanography. Ivan believes our
generation is the last with the opportunity to
save the variety of life on earth.

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