Sandboxing Nature: Bringing regulatory flexibility to conservation innovation

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Today we’re releasing a new paper, Sandboxing Nature, in which we suggest taking an approach called a “regulatory sandbox”—a flexible testing ground for new innovations—and applying that to conservation, for faster conservation and restoration outcomes.

Around the world, regulatory sandboxes are opening the door to speedier adoption of new technology that has enabled solar energy trades among neighbors, bank accounts for homeless people, and mobile platforms to buy and track insurance for mosquito-borne disease. What makes a sandbox unique is that it grants a temporary exemption from old regulations that impede new tech, but in a way that controls the risk for consumers. We think adopting a sandbox approach to conservation could foster a creative culture to help speed up environmental restoration.

The basic premise is this: our planet is in peril but we aren’t moving fast enough to save it. There are many important reasons why, but one of them is that ponderous regulatory systems and older generations of bureaucrats can’t keep pace with new technologies, tools, and products. Rather than simply accept this regulatory status quo, we believe government can find, nurture, and learn from new tools even when it means deliberately breaking old rules.

The sandbox approach has taken off around the world, especially in financial technology and energy services. Over 20 countries have adopted some form of fintech or energy regulatory sandbox.

  • The U.S. Consumer Financial Protection Bureau, first proposed by then-professor Elizabeth Warren, has two sandbox-like initiatives. They issue regulatory waivers for trials of financial disclosures that aim to improve the delivery of information. Second, they host a sandbox to allow testing of new consumer financial products and services.
  • Singapore has developed an energy regulatory sandbox that allows testing of new approaches to energy efficiency in power generation, energy storage, demand management and electricity futures.
  • The UK’s energy regulator, Ofgem, created and staffed a new sandbox for energy innovation.  An example project accepted into the sandbox involves an energy company piloting neighbor-to-neighbor trading of power using blockchain financial transaction software that allows residents in apartment buildings to buy and sell power to each other through the work of Repowering London.
  • Most European Union countries have established ‘innovation facilitators’ for Fintech, a government office that serves as a point of contact for innovators to get non-binding guidance and problem solving assistance from the appropriate regulatory agency and where staff exclusively focus on this problem-solving and collaboration role, rather than filling both a regulatory and facilitation role.  Five of these countries have regulatory sandboxes that work in concert with the innovation facilitators.
  • In March of 2018, Arizona became the first U.S. state to enact regulatory sandbox legislation for the fintech industry. Arizona’s first approved sandbox participant is testing technology that allows hotel and spa guests to pay for services via their bank account on a mobile phone, without credit cards.

Building on the ideas of other sandboxes, we can open the door to new conservation approaches. We can do a better job of recognizing where outdated environmental laws are lacking and look for ways to launch transformation.

Here are two examples of potential sandboxes in environmental policy and regulation:

  1. Addressing stormwater-related water quality goals faster

American cities are increasingly managing stormwater runoff to reduce pollution in streams, rivers, and large water bodies like the Chesapeake Bay and Gulf of Mexico. Sometimes they install expensive water treatment facilities. If regulators allow it, those cities and suburbs can often achieve the same water quality goal at a much lower price by working with partners in other parts of the watershed to install green infrastructure and conservation practices. However, this is a new and expanding area of work where professionals are testing new techniques all the time. For example, Opti is using real time data to optimize stormwater and flood control systems, but they’re often stuck in cities’ multi-year consent decree and permit renewal processes before deploying solutions. A sandbox for stormwater tech could encourage testing ways for cities to achieve their stormwater-related water quality goals faster and more cost-effectively by creating a quicker path for EPA or states to approve permit amendments and other approvals, and quickly deploy and learn from new techniques.

  1. Payments for soil health

Farmers and ranchers get paid for conservation practices that achieve soil health improvements when they participate in certain USDA programs; payment rates are pre-determined for each conservation practice. But what if they had the flexibility to tailor their approaches and methods to their own lands and get paid a set amount based on soil health outcomes rather than practices? An agricultural conservation sandbox would create an alternative to USDA’s traditional paperwork and conservation practice approach, testing the theory that ranchers and farmers could achieve better and faster soil health benefits with the same level of payments that they currently do with USDA programs. In essence, the sandbox would say, “if you use an approved method to measure the before/after conditions of nitrogen, phosphorus, sediment, pollinator habitat or other benefit, we will pay you a pre-set rate.” Such a sandbox would bypass USDA’s cumbersome process of developing, amending and revising conservation practices that often don’t make sense on the ground.

If the regulatory structure is not helping us restore species or habitat, testing new approaches that incorporate the latest technology, even if they don’t fit under current regulation, is worth trying. We look forward to new collaboration and discussion to bring innovation to conservation. Please take a look at Sandboxing Nature and let us know what you think.

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