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Sustainable management of space activity in low Earth orbit

Author

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  • Julien Guyot
  • Sébastien Rouillon

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.

Suggested Citation

  • Julien Guyot & Sébastien Rouillon, 2024. "Sustainable management of space activity in low Earth orbit," Journal of Environmental Economics and Policy, Taylor & Francis Journals, vol. 13(2), pages 188-212, April.
    • Handle: RePEc:taf:teepxx:v:13:y:2024:i:2:p:188-212
    DOI: 10.1080/21606544.2023.2231402
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