Regulatory experiments and real-world labs: A fruitful combination for sustainability

Abstract

What are regulatory experiments and how can they contribute to sustainability transformations? We seek to answer these questions by considering regulatory experiments in the energy sector and exploring their potential impact pathways. Different kinds of regulatory experiments can be combined with real-world labs to expand their scope and their impacts to the regulatory realm.Regulatory experiments (RegExs) can be considered an element of mission-oriented innovation policies. As such, we discuss how they relate to real-world labs (RwLs) and how they can contribute to sustainability transformations. We distinguish between two types of experiments: 1. regulatory sandboxes that help innovators to bring new products, services, and other innovations to market, and 2. regulatory-innovation experiments that are specifically designed to explore new solutions for evolving regulatory frameworks. The two types can be linked to RwLs such that an RwL can be embedded in a regulatory sandbox, enabling the RwL to try out solutions that would not be feasible without the sandbox, given the regulatory framework in place. Alternatively, the various experiments in the RwL are complemented by one or several regulatory-innovation experiments. RegExs, as a form of experimental policy engagement, are an important addition to RwL concepts in a sustainability transformation context. They contribute to both innovative sustainability solutions as well as regulatory learning and testing of regulatory innovations. By applying the programme theory approach and developing a Theory of Change for RegEx, we discuss their potential impact on sustainability transformations in terms of the directionality and the acceleration of change, based on examples from the energy sector.