Around the world, “regulatory sandboxes”—flexibletesting grounds for new innovations—are opening the door to speedier adoptionof new technology that has enabled solar energy trades among neighbors, bankaccounts for homeless people, and mobile platforms to buy and track insurancefor mosquito-borne disease. What makes a sandbox unique is that it grants atemporary exemption from old regulations that impede new tech, but in a waythat controls the risk for consumers. We think adopting a sandbox approach toconservation could foster a creative culture to help speed up environmentalrestoration.
The basic premise is this: our planet is in peril but wearen’t moving fast enough to save it. Ponderous regulatory systems and oldergenerations of bureaucrats aren’t keeping up with fast pace of newtechnologies, tools, and products. Rather than simply accept this regulatorystatus quo, we believe in the need to find, nurture, and learn from newconcepts even when it means deliberately breaking old rules.
The sandbox approach has taken off around the world,especially in financial tech and energy services. Over20 countries have adopted some form of fintech or energy regulatory sandbox.
- The U.S. ConsumerFinancial Protection Bureau has two sandbox-like initiatives. They issue regulatorywaivers for trials of financial disclosures that aim to improve the delivery ofinformation. Second, they host a sandbox to allow testing of new consumerfinancial products and services.
- Singaporehas developed an energy regulatory sandbox that allows testing of newapproaches to energy efficiency in power generation, energy storage, demandmanagement and electricity futures.
- The UK’s energy regulator, Ofgem, created and staffsa newsandbox for energy innovation. Anexample project accepted into the sandbox involves an energy company pilotingneighbor-to-neighbor trading of power using blockchain technology thatallows residents in apartment buildings to buy and sell power to each otherthrough the work of Repowering London.
- Most European Union countries have established‘innovation facilitators’ for Fintech, a government office that serves as apoint of contact for innovators to get non-binding guidance and problem solvingassistance from the appropriate regulatory agency and where staff exclusivelyfocus on this problem-solving and collaboration role, rather than filling botha regulatory and facilitation role. Fiveof these countries have regulatory sandboxes that work in concert with theinnovation facilitators.
- In March of 2018, Arizona became the first U.S. state toenact regulatorysandbox legislation for the fintech industry. Arizona’s first approved sandbox participant is testingtechnology that allows hotel and spa guests to pay for services via their bankaccount on a mobile phone, without credit cards.
Building on the ideas of other sandboxes, we can open thedoor to new conservation approaches. We can do a better job of recognizingwhere outdated environmental laws are lacking and look for ways to launchtransformation. If the regulatory structure is not helping us restore speciesor habitat, testing new approaches that incorporate the latest technology, evenif they don’t fit under current regulation, is worth trying. Next month we’llshare our report on Sandboxing Nature and we’ll look forward to newcollaboration and discussion to bring innovation to conservation.
