1. Space sustainability and the OECD

The long-term sustainability of space-based infrastructure on orbit and beyond is an emerging policy issue that is likely to become increasingly important in the coming decades. In 2021, more objects were launched into space than in the entire preceding decade. In the coming years, public and private actors worldwide are planning to launch tens of thousands of satellites into the Earth’s orbits, paving the way for a steep increase in the use of space resources.

Outer space seems infinite. However, certain orbital regions around the Earth are rapidly becoming congested and this raises important questions about the long-term sustainability of space activities. Are there substantial negative externalities associated with space manufacturing and launch activities? What are the environmental implications of producing and launching objects into space? How does it affect the stability of the orbital environment? What about socially equitable access to the services flowing from space resources between nations and over the coming decades and centuries?

In 2019, the United Nations’ Committee on the Peaceful Uses of Outer Space (UN COPUOS) reached an international agreement on guidelines for the “long-term sustainability of outer space activities”, that would ensure:

“[…] the ability to maintain the conduct of space activities indefinitely into the future in a manner that realizes the objectives of equitable access to the benefits of the exploration and use of outer space for peaceful purposes, in order to meet the needs of the present generations while preserving the outer space environment for future generations.” (UN COPUOS, 2018[1])

This agreement reflects increased awareness about the negative externalities surrounding activities in space and particularly of the unrestricted use of certain orbits of value for activities on Earth.

The accumulation of space debris in the Earth’s orbits and the threat it poses to orbital environmental stability is one of the most pressing challenges to the long-term sustainability of space operations. However, there are other dimensions to space sustainability, such as the management of space traffic, the allocation and use of the electromagnetic spectrum, the environmental terrestrial impacts of space activities, social and economic sustainability, etc.

This publication focuses on the environmental and economic sustainability of human orbital activities, as the economic development of the space sector is closely interlinked with the growing risks of a debris-filled orbital environment. Indeed, economic and environmental objectives will increasingly need to be balanced in the future if the full potential of the space economy is to be realised. The sustainability of space manufacturing and launch activities and their impact here on Earth and in the atmosphere may be the subject of future research.

Over recent decades, international organisations and bodies (e.g. the United Nations’ Committee on the Peaceful Uses of Outer Space, the Inter-Agency Space Debris Coordination Committee), national administrations and space agencies have carried out extensive work on space debris mitigation and the sustainability of space activities. This work has mainly concentrated on the technical aspects of space debris and specific guidelines for the most congested regions in the low-earth orbits and the geostationary orbit.

Less attention has been given to the economic aspects of space sustainability, however. For example, the socio-economic costs that space debris inflict on the direct users of space-based resources and on society as an end-beneficiary of space products and services or the value of space-based infrastructure and the threats to which it is exposed have yet to be analysed in detail. This is despite a growing reliance on space. Space-based infrastructure provides some of the best, and in some cases only, sources of data and signals for multiple human activities, ranging from weather forecasting and sea navigation to telecommunications. Notably, space is a key component of increasingly digitalised economies. Space activities are playing a role in furthering social well-being and sustainable growth in the post-COVID pandemic recovery; contributing to bridging the digital divide; monitoring the changing climate, extreme weather and the use of natural resources; as well as creating new economic opportunities (OECD, 2020[2]; 2021[3]). Collecting evidence on the value of space-based infrastructure and the costs of its potential disruption should be a priority for all space-faring member countries of the OECD and beyond.

The OECD Space Forum, within the OECD Directorate for Science, Technology and Innovation, is at the intersection between the space sector, science and technology policy, and economic and industrial policy and is uniquely placed to address this multidimensional issue. On the initiative of several of its Steering Group members, the OECD Space Forum launched a project on space sustainability and the economics of space debris in 2019. This publication is one of the outputs of this ongoing activity.

Managing the growth of both the number of operational satellites and debris in space has created new challenges for government agencies and decision makers. Some of these challenges are of a technological or administrative nature. Improving capabilities to detect and track space objects, for example. Others are more strategic in nature and concern policy making for economic development. Currently, on some aspects, policy makers do not have sufficient evidence to take informed decisions about debris mitigation and remediation. Answers to the following questions are particularly crucial:

  • What value does space-based infrastructure bring to society?

  • What are the potential costs of space debris on space activities and the broader society?

  • What are the benefits and costs of different policy options, including “doing nothing”?

The OECD project sets out to answer these questions in co-operation with the international community.

The initial phase of this project focused on the economics of space debris and was a considerable team effort. Several Space Forum members – notably the Canadian Space Agency (CSA), the US National Aeronautics and Space Administration (NASA) and the UK Space Agency (UKSA) – guided the work and co-organised the OECD Workshop on the Economics of Space Debris, hosted by the CSA in Montreal in June 2019. Space debris experts from the French National Centre for Space Studies (CNES) and the German Aerospace Centre (DLR) provided further inputs. Commercial satellite operators were consulted through a survey that was circulated to some 20 operators between July and October 2019 to gain a better understanding of industry perspectives on the issues of space debris mitigation to inform policy discussions.

The work presented in Undseth, Jolly and Olivari (2020[4]) provided a first-time comprehensive economic analysis of space debris. It identified the most relevant socio-economic impacts and explored a range of policy responses. These findings are summarised and updated in Chapter 2 of this publication. The study also identified several areas of research to better support policy decisions, and notably, the need to better quantify both the costs of space debris and the value of space-based infrastructure.

Building on these initial efforts to understand the value and sustainability of space-based infrastructure, the OECD launched an initiative in early 2021 to bring in the perspective of external actors. The OECD Space Forum invited young researchers, Master’s and PhD students, and faculty members in universities and other research organisations from across the OECD to author research papers and provide initial answers to two fundamental questions: 1) what is the value of space-based infrastructure; and 2) what are the potential costs of space debris?

More than 30 academic institutions, many of which are relatively new to the space domain, attended various events organised throughout the year, including the project launch, several bilateral briefings, a “pitching” event, and a “meet-the-experts” questions and answers session. The initiative ended with a workshop in November 2021 that presented the different selected academic contributions and discussed the remaining challenges. The following online events took place in 2021:

  • project launch (16 February 2021)

  • “Meet the Experts” meeting, with experts from space agencies presenting the latest trends in space policies and space debris evolutions (13 April 2021)

  • “Researchers in Action” workshop, with researchers presenting their respective approaches (7 June 2021)

  • OECD Workshop on the Value and Sustainability of Space-based Infrastructure, presenting the main results of the initiative, most of which are summarised in this publication (4 November 2021).

The initiative has produced papers that were reviewed by the OECD and its partnering space agencies and ministries from ten countries as well as the European Space Agency.

Several original approaches to addressing the research questions were introduced, building on: environmental economics; organisational theory; data envelopment analysis methods; brand new industry surveys; and cause-and-effect and propagation modelling exercises. This led to innovative studies on the:

  • valuation of selected downstream space activities

  • modelling of the potential economic costs of space debris

  • modelling of possible cost efficiencies

  • modelling of policy responses for space debris mitigation

  • exploration of an active debris removal market.

Seven papers were selected for publication in this report from authors in five countries and with wide-ranging backgrounds in economics, engineering, environmental science, physics and management studies. Shortened versions of the papers are featured as individual chapters in this publication and are detailed in the outline at the end of this chapter. Other interesting papers that were not selected for publication are referenced in Chapter 2.

Beyond the tangible outputs, the project has also nurtured a community of practitioners in space-related economic research. Many of the participants did not have previous knowledge of or experience in the space sector and this exercise helped encourage the development of expertise throughout key OECD research institutions. In addition, new links have been created between government agencies and academic actors, which may lead to more collaboration in the future.

Society is at the beginning of a challenging research effort to accumulate the knowledge and evidence needed to ensure the sustainable use of the Earth’s orbits.

As part of this effort, the OECD exercise on the economics of space sustainability will be repeated in 2022-23, with the aim to expand the international knowledge base and ultimately support future policy making.

The following key aspects require further research:

  • More evidence is needed on emerging practices and policy options, such as the costs and benefits of space debris remediation. Organisations that licence space activities also need more evidence on the economic impacts of new types of missions (e.g. deploying and announced mega-constellations of several thousand satellites in the low-earth orbit).

  • More evidence is also needed on the appropriate policy instruments to internalise the costs of space debris and/or to incentivise space actors to follow debris mitigation guidelines (e.g. standards, market-based instruments such as taxes or insurance). Examples of instruments abound in other domains (e.g. marine and air pollution, hazardous waste), but little is known about their application in the space sector in terms of economic impacts, public acceptance or overall effectiveness.

  • More concrete evidence tailored to users’ needs is also needed. Evidence risks being ignored if it is too general or abstract.

  • Finally, the cost of non-action needs to be determined. There is a strong need to establish a robust counterfactual to compare with the costs of all other actionable policy options.

Developing this new evidence will require advances on multiple fronts, notably:

  • Learning more about risks (frequency of incidents and their impacts): Many incidents go unreported by operators either knowingly or because of a lack of observational capacity. Data-sharing between operators needs to be improved.

  • Modelling the future limits of human activity in different orbits: Whereas government agencies have made progress in modelling the physical environment, knowledge is still insufficient about the nature and timelines for space debris tipping points of human activity in space. Furthermore, more work is needed on the use of valuable orbits and the electromagnetic spectrum from a resource utilisation perspective.

Charting an effective way ahead will require concerted action from public and private actors, at both the national and international levels. National measures will be key to reaching objectives in the short and medium term, but their impact will be maximised through collaboration with other countries and private actors. Governments may consider:

  • supporting further efforts from academia and beyond in developing evidence on the possible impacts of space debris on society, including the possible costs of inaction

  • reinforcing efforts to stimulate research and development in support of regulatory action and other policy options (costs and benefits of different policy options, costs of non-action).

This publication aims to put the issue of space sustainability higher on the policy agenda and presents the main findings of the first phase of the OECD Project on the Economics of Space Sustainability. It provides a compilation of original research articles.

The contents are organised as follows:

  • Chapter 2 sets the scene for the rest of the publication and summarises recent OECD findings. It provides an overview of the major challenges to space-based infrastructure, short- and longer term costs of space debris and mitigation efforts.

The following chapters result from the original work produced in 2021 by academic participants. They provide novel approaches and evidence in two principal areas:

  • Chapter 3 introduces an analytical framework and econometric model for estimating the cost of space debris from a global and national perspective, based on approaches developed in the field of environmental economics.

  • Chapter 4 estimates the potential economic damage resulting from space debris accumulation (and an early onset of the Kessler Syndrome), by quantifying the economic value of space-enabled activities at risk from the deterioration of certain orbital regimes and calculating the average probability of orbital deterioration.

  • Chapter 5: Earth observation is one of a number of key activities that is potentially vulnerable to being disrupted by space debris. Serving as a case study representative for many OECD countries, the chapter presents the findings of a survey carried out among earth observation firms in Italy, identifying current and potential socio-benefits of space-based earth observation, as well as barriers that could hamper growth in the sector.

  • Chapter 6 estimates the growth in space objects in low-earth orbit in the coming decades. It then employs a qualitative approach to assess satellite operators’ economic incentives to adopt debris mitigation measures by comparing mitigation costs and potential collision damage costs.

  • Chapter 7: Debris removal may at some point become necessary to stabilise the orbital environment, but technological and commercial maturity levels are still quite low. The chapter studies the development of a market for active debris removal, building on a database of active debris and on-orbit servicing projects. It identifies the specificities of the sector and explores the conditions under which such a market could emerge.

  • Chapter 8: Inspired by the network structure of co-operation between countries, the chapter models strategic interaction between different firms (that compete but do not fully account for the negative externalities of their actions) to study the outcomes in terms of space debris generation under different market structures. It suggests that welfare loss will increase significantly without global regulatory intervention to address space debris.

  • Chapter 9 applies efficiency analysis to a sample of satellites to empirically investigate the efficiency of satellite launches. Findings show an overall low level of efficiency, indicating room for improvement in mission efficiency and ultimately, for limiting future debris creation.

These chapters provide novel contributions to the evolving body of evidence on the economics of space sustainability. The OECD Secretariat would like to thank all the authors and their institutions for their involvement in this initial stage of the project. As a next step to this first original compilation of research, new academic contributions will be spurred by the OECD and partnering space agencies to further deepen some of the issues presented in this publication.

References

[3] OECD (2021), “Space economy for people, planet and prosperity”, background paper for the G20 Space Economy Leaders’ Meeting, 20-21 September, Rome, Italy, https://www.oecd.org/sti/inno/space-forum/space-economy-for-people-planet-and-prosperity.pdf.

[2] OECD (2020), “The impacts of COVID-19 on the space industry”, OECD Policy Responses to Coronavirus (COVID-19), OECD, Paris, https://www.oecd.org/coronavirus/policy-responses/the-impacts-of-covid-19-on-the-space-industry-e727e36f.

[1] UN COPUOS (2018), Guidelines for the Long-term Sustainability of Outer Space, Committee on the Peaceful Uses of Outer Space, https://www.unoosa.org/res/oosadoc/data/documents/2018/aac_1052018crp/aac_1052018crp_20_0_html/AC105_2018_CRP20E.pdf.

[4] Undseth, M., C. Jolly and M. Olivari (2020), “Space sustainability: The economics of space debris in perspective”, OECD Science, Technology and Industry Policy Papers, No. 87, OECD Publishing, Paris, https://doi.org/10.1787/a339de43-en.

Metadata, Legal and Rights

This document, as well as any data and map included herein, are without prejudice to the status of or sovereignty over any territory, to the delimitation of international frontiers and boundaries and to the name of any territory, city or area. Extracts from publications may be subject to additional disclaimers, which are set out in the complete version of the publication, available at the link provided.

© OECD 2022

The use of this work, whether digital or print, is governed by the Terms and Conditions to be found at https://www.oecd.org/termsandconditions.