Regulating emerging technologies — NSW Productivity Commission

By Peter Achterstraat

December 2, 2021

e-bike
E-bikes are an environmentally sustainable way to travel. (Freepik/Adobe)

OPINION

According to the classic ’80s movie Back to the Future, we should all be driving flying cars by now. As it turned out, most of us have barely left our houses over the past two years, let alone personally piloted a commuter vehicle. We’re closer to having the technology but, just like with self-driving cars, getting the regulation right will be key to widespread adoption.

Fostering innovation can be challenging for governments, and regulation can allow innovation to flourish — or be stifled. This week, I released a new report that proposes a light-touch regulatory approach designed to encourage the uptake of emerging technologies while managing any risks to society.  The NSW Productivity Commission’s Regulating Emerging Technologies report focuses on three emerging technologies — personal mobility devices (PMDs), e-bikes, and drones. They provide significant opportunities to transform the movement of people and goods, but need updated regulation to realise their full potential.

PMDs (such as e-scooters) and e-bikes, offer a more environmentally sustainable way to travel compared with cars and motorbikes because they do not release emissions during use and require little energy to charge. With the transport sector accounting for 22% of NSW’s greenhouse gas emissions, supporting the uptake of these devices should be a key part of our net-zero emissions plan. PMDs and e-bikes can also reduce congestion where they replace car trips and get us where we need to go faster, increasing productivity for our cities and regions.

Revising NSW laws that restrict the use of PMDs, including e-scooters, to private property could enable up to 10 million trips per year by 2041 and provide up to $87 million in net benefits in the next 20 years. We have been working closely with Transport for NSW in this area and look forward to seeing the results of the 12-month trial on e-scooters as announced by the minister for transport and roads on the weekend. 

The potential of e-bikes has also been constrained by regulations. In Australia, they are subject to speed and power limits that are modest by international standards. The same power limits are applied to e-bikes used for deliveries (known as e-cargo bikes) as those used for private use. This limits the ability of e-cargo bikes to carry heavier loads at a time when e-commerce and food delivery is booming, and as numerous sectors are looking to electrify their vehicles.

Overseas studies have found e-cargo bikes can take up to 60% less time than vans for last-mile deliveries in urban areas. This offers significant cost savings for businesses and consumers as the last mile can often account for more than half of parcel delivery costs. A national review of regulatory options to safely support faster e-bikes and more powerful e-cargo bikes are needed.

Drones are another emerging technology that can offer better and safer ways of working. For instance, drones can be used on farms to locate and inspect livestock in place of manual inspections on quad bikes or trucks.

Commonwealth regulations make it costly and time-consuming to operate drones beyond the line of sight and at night. Farmers must wait two months and spend up to $26,000 on training and regulatory fees before they can use a drone to spray crops beyond the line of sight on their own property. They must also seek permission from the Commonwealth Civil Aviation Safety Authority (CASA) each time they operate the drone beyond their line of sight. This is despite the low risk of drones colliding with other people, property, and aircraft due to the remoteness of most farms.

Simplifying the regulations for drone use could deliver up to $500 million in net benefits for NSW in today’s dollars by 2041 from safety and efficiency benefits. These benefits could be even higher as more innovative drone uses emerge and if more flexible rules were extended to drone use in other sectors. The NSW government should work with CASA to trial alternative drone rules in priority sectors, starting with agriculture.

These are just a few live examples, with many more opportunities constantly emerging. Governments should be regularly reviewing and adapting regulations to respond to these changes. Where possible, regulations should be technology-neutral and focused on outcomes, rather than based on a particular business model or technology, to allow businesses greater flexibility to innovate.

Starting the conversation about the right regulatory settings now will position us to benefit from future innovation and deliver better economic, social, and environmental outcomes for the people of NSW.

We might not be zipping about in flying cars by next year, but the government can already build the regulatory habits that will allow us to capitalise on new ways of working and living.


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