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The Economics of Orbit Use: Open Access, External Costs, and Runaway Debris Growth

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  • Akhil Rao
  • Giacomo Rondina

Abstract

We present a dynamic physico-economic model of Earth orbit use with endogenous satellite collision risk to study conditions under which debris-producing collisions between orbiting bodies result in debris growth that may render Earth’s orbits unusable, an outcome known as Kessler syndrome. We characterize the dynamics of objects in orbit under open access as well as when external costs—the impact of an additional satellite launch on the collision risk faced by all satellites—are internalized, and we show that Kessler syndrome can emerge in both cases. Finally, we show that once the economic incentives of satellite launching are modeled, for Kessler syndrome to emerge, autocatalytic debris growth is essential. In our main calibration, Kessler syndrome can emerge anytime between the year 2040 and the year 2184, with the precise date being very sensitive to the calibration of autocatalytic debris growth parameters.

Suggested Citation

  • Akhil Rao & Giacomo Rondina, 2025. "The Economics of Orbit Use: Open Access, External Costs, and Runaway Debris Growth," Journal of the Association of Environmental and Resource Economists, University of Chicago Press, vol. 12(2), pages 353-388.
    • Handle: RePEc:ucp:jaerec:doi:10.1086/730695
    DOI: 10.1086/730695
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    Cited by:

    1. Julien Guyot & Akhil Rao & Sebastien Rouillon, 2022. "The long-run economics of sustainable orbit use," Working Papers hal-03896730, HAL.
    2. Anelí Bongers & César Ortiz & José L. Torres, 2025. "DISE: A Dynamic Integrated Space-Economy Model for Orbital Debris Mitigation Policy Evaluation," Environmental & Resource Economics, Springer;European Association of Environmental and Resource Economists, vol. 88(8), pages 2125-2156, August.
    3. Akhil Rao & Mark Moretto & Marcus Holzinger & Daniel Kaffine & Brian Weeden, 2023. "OPUS: An Integrated Assessment Model for Satellites and Orbital Debris," Papers 2309.10252, arXiv.org.
    4. Aneli Bongers & Jose L. Torres, 2025. "Business-as-Usual and Orbital Debris Path," Space Economics Working Papers 08-2025, Institute for Space Economics, revised Sep 2025.
    5. Aneli Bongers & Jose L. Torres, 2025. "On the Social Cost of Orbital Debris," Space Economics Working Papers 04-2025, Institute for Space Economics, revised Mar 2025.

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