Since we last wrote about using the regulatory sandbox tool to improve how we manage conservation in America, some new sandboxes have cropped up around the world that help demonstrate how flexible this tool can be. A quick review of online resources (with help from Google Translate) revealed a few new trends in the sandboxes both in the U.S. and abroad:
Trend #1: Design sandboxes to address data privacy challenges that come with new data tech
Two new European sandboxes are focused on cracking the data privacy nut: New technology that collects and analyzes personal data can potentially solve a lot of interesting challenges in healthcare, education and workforce management. However, personal data privacy is a concern and Europe has a data privacy and protection rule governing how personal data can be shared.
Norway’s Data Protection Authority (DPA) has launched a “responsible artificial intelligence” sandbox aimed at helping companies develop AI products that handle extensive amounts of personal data while protecting privacy. This sandbox is a departure from the first wave of sandboxes because it focuses generally on AI projects that have privacy implications, but without restricting which sectors can participate in it. The first call for applicants attracted a wide range of proposals from across the public and private sectors—including finance, health, education, food tech and workforce development. The DPA recently selected just 4 projects out of the 25 that were submitted in early 2021. The participants will include 2 public sector and 2 private sector organizations.
France has also launched a sandbox with data privacy as a key aim, in the healthcare field. Their sandbox doesn’t allow exemptions from Europe’s data protection rule, but it promotes innovation in health data products that uphold privacy requirements.
The tension between new technologies and data privacy is highly relevant in the U.S. conservation space, too. As new monitoring products come online for remote sensing of farm practices or for tracking fish harvest on commercial fishing boats, farmers and fishermen may have data privacy concerns. At the same time, accurate and automated data collection can speed up monitoring tasks and reduce the costs and hassle of deploying human monitors in difficult-to-reach places. What if the U.S. pursued a nature sandbox that supports innovation in environmental monitoring while protecting personal data?
Trend #2: Solve specific challenges identified by the sandbox authority
Singapore’s Energy Market Authority, which manages a sandbox, has begun issuing “challenge statements” to solicit help from industry for advancing the deployment of clean and efficient energy and electric vehicles. In the event a proposed solution requires a regulatory waiver, the sandbox can be called in to help. One of the challenge questions aims to sort out the regulatory environment needs surrounding vehicle-to-grid technology that allows electric vehicle batteries to return power directly to the grid (or to buildings or homes).
What if US Fish & Wildlife Serive issued a request for solutions that save more endangered species, and invited innovators to submit requests to participate in a sandbox to test out those solutions?
Trend #3: Streamline the application and licensing process
Singapore has simplified their energy sandbox application, estimating it now takes just 30 minutes to complete the 19 fields. West Virginia’s new fintech sandbox, which gained legislative approval in 2020, will be the first to use the NMLS platform—the same website used for mortgage brokers to register and maintain licenses—for its sandbox applicants to register and maintain their fintech license. I emailed the West Virginia Division of Financial Institutions and they explained that using NMLS solved a few problems: West Virginia uses it for other licensing needs so it could accommodate their needs immediately, it’s paperless, and it offers the potential to seamlessly transition a successful sandbox participant to the formal registration process using the same platform.
These streamlined application processes are inspiring because we’re interested in finding ways to streamline environmental permitting for restoration projects that deliver environmental net benefits. Michigan—a state that has lost about 50% of its historic wetlands—enacted two bills in 2018 that make it easier for voluntary wetland restoration projects to get permitted quickly. The bills define “functional uplift” for wetlands and require a working group of state regulators and Ducks Unlimited to meet regularly to evaluate the bills’ impacts and seek adaptations or improvements as needed to meet the goals of faster wetland restoration in the state. In other states, a 2-year sandbox could be the right tool for testing broad-scale fast-tracking of restoration projects that deliver quantifiable “functional uplift.”