In the company where I work, we have 2 environments: test and production. We are not currently starting a new environment, because of cost.
Here is the procedure we
At our company there are two databases too, a test and a production database. The test database is mainly used for testing by developers but sometimes for business tests too. This database is refreshed daily using an actual copy of the production database. So this database can be both a playground and a serious testing database. But a third, development, database is the best option. We had one, but it is broken at the moment. But when you get one of those, you should make sure it is refreshed often enough. When developers use it as a playground, it will stray away from the production environment, and its data will be both old and currupt. Because of this, developers won't be able to test well themselves. So make sure you refresh this database periodically (maybe daily too, or at least once a week).