Publications

Abstract

We analyze the externality caused by the accumulation of space debris, focusing on the long-term equilibrium induced by a constant rate of satellite launches. We give conditions such that the long-term population of functioning satellites is an inverted-U shape function of the launch rate. We compare typical ways of managing the orbit. The maximum carrying capacity is the maximum population of satellites that the space sector can sustain in the long run. The physico-economic equilibrium occurs under open-access to the orbit. The optimal policy maximizes the present value profit of the space sector. Finally, we discuss the use of standard economic instruments (command-and-control, tax and market) to regulate space activity in order to achieve an optimal outcome. A numerical application based on a realistic calibration illustrates all results.

JEL Classification: L1; L9; Q2.

Keywords: Space Economics; Orbital Debris; Sustainability

Abstract

This paper extends the analysis initiated by Rouillon [2020. “A Physico-economic Model of Low Earth Orbit Management.” Environmental and Resource Economics 77 (4): 695–723. https://doi.org/10.1007/s10640-020-00515-z] of the externality caused by space debris. Satellite operators make choices about the design and launch of satellites, while in-orbit servicing firms supply efforts to remove space debris. Focusing on the long-term orbital state, we compare two management regimes. The open access equilibrium occurs when the orbit is a common resource. The optimal policy maximizes the net present value generated periodically by the space industry. We investigate economic instruments capable of effectively regulating space activity. We show that the combination of an ad valorem tax, a launch tax, and a market for removal effort certificates can provide the right incentives. A numerical application using a realistic calibration illustrates our results.

JEL Classification: L1; L9; Q2.

Keywords: Space Economics; Orbital Debris; Sustainability

Abstract

This paper studies the economic consequences of orbital debris for commercial outer-space activities. Spacecraft launches and other outer-space human activities produce pollution (i.e., orbital debris), which represent a hazardous negative externality increasing the risk of collision and the destruction of satellites. We regard outer space as a global common resource, where firms operating satellites maximize profits and do not internalize the social cost of orbital pollution. We develop a dynamic investment model for satellites and simulate the calibrated model to estimate how debris affects the optimal quantity of satellites and launches, and the number of satellites destroyed by collisions. We find that the optimal quantity of satellites is a negative function of the amount of debris. The paper derives a simple expression for the maximum number of satellites to prevent the Kessler syndrome. For the baseline calibration of the model, the estimated threshold for the maximum number of satellites in orbit is about 72,000. The model is simulated to study the effects of a decline in the launch cost and the increasing number of satellites per launch.

JEL Clasiffication: D62; Q53; L80.

Keywords: Outer space; Satellites; Launches; Debris, Risk of colission; Kessler syndrome.

Abstract

The militarization and weaponization of outer space are increasing continuously with the development of new and more advanced space weapon systems by a growing number of nations. This is a direct consequence of the high and growing strategic value of outer space for defense, security, and warfare. This paper reviews trends in space weapon systems and analyzes the implications of anti-satellite military weapons for human activities in outer space. A direct consequence of the completion of anti-satellite military tests is that the amount of orbital debris has increased significantly. We use a simple physical – economic model to illustrate how anti-satellite military tests, particularly those using direct-ascent weapons, dramatically increase the probability that the Kessler syndrome will occur. Whereas the long-run impact of low altitude anti-satellite tests is limited because of atmospheric drag, at high altitude direct-ascent anti-satellite tests are persistently harmful for human activities in space. The paper also provides a simulation of the long-run effects of a war in space.

JEL Classification: D62; F51; H56.

Keywords: Outer space; Anti-satellite weapons; Orbital debris; War in space.