THE ECONOMICS OF ORBITAL CLUTTER

THE ECONOMICS OF ORBITAL CLUTTER

Orbit is getting dangerously crowded. Private and public operators are starting to worry about shrinking celestial elbow room due to the proliferation of commercial satellites and ratchets in the volume of space debris. The problem is not yet unmanageable, but could quickly get out of hand. Space traffic jams threaten the economic, scientific, and humanitarian uses of space.

Fortunately, we can do something about orbital crowding. While technical and engineering solutions are always welcome, we should pay much more attention to how social science can help us understand and mitigate space clutter. Well-crafted public policy, informed by the tools of economics, is crucial for preserving orbital integrity.

An Overview of Orbital Congestion

Two factors drive orbital congestion. The first is the rapid growth in the number of commercial satellites. Companies like SpaceX and OneWeb are planning on putting tens of thousands of satellites into orbit as part of their megaconstellation systems for satellite internet. Their efforts towards making satellite internet commercially viable, especially for citizens of less-developed nations, are commendable. But placing so much hardware into orbit increases the risk of collisions. This is not merely theoretical. According to Quartz’s Space Business newsletter, in 2019 SpaceX satellites were involved in roughly 1% of all satellite conjunctions (close passes) under one kilometer. In 2020, that figure shot up to 10%. Since that excludes conjunctions where both satellites are SpaceX’s, the problem is even worse.

Source: NASA, Orbital Debris Quarterly News, 25(1) 2021, p. 10
Source: NASA, Orbital Debris Quarterly News, 25(1) 2021, p. 10

The second problem is debris. NASA defines orbital debris as “any man-made object in orbit about the earth which no longer serves a useful function.” The first piece of space debris was the rocket body from Sputnik-1, launched in 1957. The volume of debris exploded in the ensuing decades. There are at least 20,000 pieces the size of a softball, 500,000 pieces the size of a marble, and hundreds of millions of smaller pieces. This last category is especially worrying, because debris that size often cannot be tracked. Given extreme orbital velocities — on average, objects in low-earth orbit travel 17,500 miles per hour — even tiny debris fragments can damage or destroy valuable space assets.

When it comes to debris, governments are the worst polluters. Figure 1, which shows the monthly number of objects in orbit, has several discontinuities. The large spike in debris from 2007, for example, was due to a deliberate anti-satellite weapons test by the Chinese government. India conducted a similar test in 2019. The pursuit of power is just as much to blame as the pursuit of profit.

Whether due to increases in viable assets or useless junk, crowded orbits could spell catastrophe for humanity’s space ambitions. The nightmare scenario, called “Kessler syndrome” after the NASA scientist who studied it, is a positive feedback loop between debris and collisions: two space objects collide, creating more debris, which leads to more collisions, and even more debris. This could seriously hamper, and even cut off, our access to space.

An Economic Perspective on Crowded Orbits

How did orbit become so crowded in the first place? The tools of economics can help us answer this question. First, we must realize that orbit is a good — something which is useful for satisfying human wants. Furthermore, it is scarce, meaning there is not enough of it to satisfy everyone’s desire to use it. This raises the possibilities of conflicting plans, of which the most concerning is the collision and destruction of orbital assets.

But not all goods are created equal. Economists classify goods based on whether they are rivalrous and excludable in consumption. If a good is rivalrous, one person consuming more leaves less for others. If a good is excludable, non-payers can be prevented from enjoying its benefits. The excludability criterion is especially important. When a resource is non-excludable, it is often overused. As we will see, this is precisely what is happening in orbit.

Specific orbits are rivalrous and non-excludable. Two satellites cannot occupy the same trajectory at the same time, yet there is little preventing operators from putting more hardware into orbit. In other words, orbit is a common-pool resource. Like terrestrial common-pool resources such as fisheries, forests, and grazing land, orbit may be exploited due to bad incentives. Operators care about the expected benefits from putting additional assets in space, not the costs they impose on others in the form of orbital crowding. If you have ever heard the phrase “tragedy of the commons,” this is what it means. As economists say, “That which nobody owns, nobody cares for.”

National space agencies, as well as other regulatory bodies, create and enforce rules that keep orbit less cluttered than it otherwise would be. Internationally, however, things are different. While the United Nations produces guidelines and standards for limiting the creation of new debris, these lack the force of law. Furthermore, the 1967 Outer Space Treaty, which remains the foundational governance document for space, guarantees launching states’ continued jurisdiction over their space objects. This can make debris mitigation removal very difficult. For instance, the U.S. would need permission to remove another government’s space object, even if that object is no longer useful.

Things get even messier when we consider international geopolitics. The three major spacefaring nations are China, Russia, and the United States. Russia’s glory days in space are behind it, but China is eager to challenge the U.S. for space leadership. Both China and the U.S. have a strong incentive to get as many space assets in place while they can, to maintain or improve their strategic position against the other. But this is exactly the behavior that contributes to irresponsibility in orbit!

The tragedy of the orbital commons boils down to operators not taking full account of the costs they impose on others. Now that we have identified the essence of the problem, what can we do about it?

Pursuing Orbital Integrity

Keeping orbit usable certainly will require international cooperation. But agreements and treaties entered into by the spacefaring nations almost always require unanimous consent, which is extremely difficult to secure, especially since U.S. and Chinese space ambitions clash. We should focus on national approaches to mitigating orbital clutter.

Fortunately, policymakers and the business community appear ready to tackle the problem. In 2018, the Trump administration issued Space Policy Directive-3, an important first step in ramping up space situational awareness (SSA) and space traffic management (STM) efforts. SPD-3 directed the Department of Commerce to take over SSA and STM duties from the military. Commerce is well-positioned to do so. Last summer, the National Academy of Public Administration issued a report affirming the Office of Space Commerce as the most capable agency. The goal is creating an “open-architecture data repository” to improve SSA and STM proficiency. Knowing what is in orbit in relation to existing assets and devising an orderly scheme for controlling orbital use are crucial for the responsible use of space.

While it is often unrealized, there is huge potential for public-private cooperation here. Economics tells us that information is a public good: both nonrivalrous and nonexcludable in consumption. Since it is hard to find customers for non-excludable goods, private entities might not gather all the socially useful information we want. Government can improve on this situation, but there is no need for the state to produce information. Instead, it only has to finance it. Government can be the customer. The information itself can be profitably produced by the private sector. As Scott Pace, former Executive Secretary of the National Space Council, recently noted, “Large constellations such as Starlink, OneWeb, and Kuiper require more precise and timely data than U.S. Space Command provides and private sources for such data already exist.” Commerce’s data project for space objects reflects the comparative advantage of the public sector: purchasing, compiling, and widely sharing information, which can greatly increase space safety.

Unfortunately, this worthwhile effort is stalling. Other agencies, such as the National Oceanic and Atmospheric Administration, are dragging their heels and diverting funds to less productive projects. This threatens the U.S.’s ability to get a handle on orbital problems before they become too difficult to manage.

As diplomats continue to push for international agreements, we need to get serious about crowded orbits domestically. The first step must be improving our SSA and STM capabilities. Economics tells us the thing we need most is good information. If we lay a strong foundation by carrying out SPD-3’s directives, we can preserve orbital integrity and mankind’s future in space.

Alexander William Salter is a Senior Fellow, Sound Money Project at the American Institute for Economic Research and the Georgie G. Snyder Associate Professor of Economics in the Rawls College of Business at Texas Tech University, the Comparative Economics Research Fellow at TTU’s Free Market Institute, and a Young Voices Senior Contributor.

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