Session 3. 6.

Humanity has entered a new era of environmental crises, the impacts of which are beginning to affect our commons with increasing severity. Heatwaves are becoming more intense and prolonged, and disruptions and disasters related to climate change and ecosystem degradation are occurring more frequently. In Peru, these crises may exacerbate the food insecurity that already affects more than half of the population. This article examines the main issues surrounding the controversy regarding the role that central banks could and should play in steering economies toward a sustainable direction.

On one hand, there are those who advocate for a more active role for central banks, including the establishment of environmental criteria in their collateral frameworks and asset purchase programs, engagement in targeted longer-term financing operations, and management of their portfolios and other internal processes based on these criteria. On the other hand, opponents argue that this reorientation would distract central banks from their core mission, exposing them to politicization and jeopardizing their independence. According to this view, central banks have no role in fostering the transition to a new type of financial commons.

However, surveys conducted by the Network for Greening the Financial System (NGFS) reveal that some central banks—primarily in the European Union—are already taking steps to integrate climate change criteria into their monetary policy operational frameworks. In other regions, progress in this direction has been rather limited, against a backdrop where central banks operate through the infrastructural power of private finance and are subject to cultural and political constraints.

This article focuses on the institutional design and governance of central banks, specifically referencing the Peruvian case. It will argue that the Peruvian central bank needs to strengthen its governance to address new challenges effectively, in coordination with other actors, by operating under a collegial direction and adhering to higher standards of procedural transparency. This is essential for reinforcing its legitimacy and effectiveness in addressing complex collective action problems and ultimately fulfilling its mandate.

The ability to determine if an organization is ecologically sustainable has eluded sustainability researchers for at least three decades. The inability to do so has prevented researchers from identifying which organizations are sustainable, what causes organizational sustainability, and what is caused by organizational sustainability. The measurement problem has persisted because scholars have not approached organizational sustainability as a commons problem. This paper does so and develops the ecochain, an empirical means of determining if an organization is ecologically sustainable or unsustainable. The ecochain--the set of ecosystems that supports an organization's operations--links organizations to common-pool resource ecosystems used and affected by organizations.

An organization is ecologically sustainable if its managers satisfy two conditions: (1) they disclose the organization's complete ecochain, defined as the set of ecosystems used by the organization’s operations, and (2) they verify that the stakeholders of each ecosystem consider the ecosystem to have a sustainability status of stable or improving. The first condition builds on the supply chain concept and the benefits of supply chain transparency. The second condition introduces a novel means of empirically determining if an organization is ecologically sustainable by shifting the focus of organizational sustainability away from the organization and toward the ecosystems that enable the organization to operate. To become sustainable, an unsustainable organization must shift away from using unsustainable ecosystems or participate in the collective restoration of degraded ecosystems that remain in its ecochain.

The ecochain combines insights from organizations research with those from polycentric governance research and offers the first empirically tractable means of determining the ecological sustainability status of individual organizations. Because ecosystems are common-pool resources, determining whether an ecosystem has a sustainability status of stable or improving requires engaging all stakeholders who use an ecosystem and applying principles of sustainable commons management to evaluating if the governance framework for the ecosystem is likely to sustainably manage the ecosystem. The core insight for organizations is that organizational sustainability is a commons problem, not the problem of an individual organization.

This presentation will build on recent research projects examining climate adaptation governance; a comparative study of the United States, China and Australia that provided high-level assessment and two ground-truthing workshops in rural Australia. It is now widely accepted that transformational adaptation will require local, bottom-up drivers of change yet technical expertise, finance and knowledge of climate impacts is generally held at a national level. In addition, top-down initiatives are often short term and channelled through silos of institutions with their own cultures and points of focus. Communities in these circumstances become disillusioned, find it hard to establish priorities and the leadership required to move through a process such as the Global Resilience Framework agreed at COP 28. Polycentric forms of governance offer opportunities to consider different governance arrangements that can engage a wider range of actors in building consensus on adaptation, strengthen collaboration between different levels of government and, government and community. This requires acknowledgement and creation of preconditions by higher levels of government. These preconditions require addressing Institutional blocks to local adaptation governance. Lack of progress on adaptation is widely recognised by the IPCC, UNEP and others yet it becomes more urgent as the Paris Agreement target slips further. This presentation will consider these issues and start to sketch an outline of a path forward based on this combination of top-down and bottom-up research.