The Economics and Policy of Space Debris and Orbital Management

Abstract Satellites are at risk of collision with each other as well as with other space debris. As the number of satellites and amount of debris increase, so does the risk of collision. The risk is therefore cascading in nature. A small set of incidents can accumulate and lead to catastrophic damages or destruction of many satellites and render some orbital regions too polluted for use. This chapter provides a foundation for understanding this issue as a commons management problem. It defines orbitals carefully and provides selective information and facts about their use. The chapter discusses orbitals in terms of the economic principles of rivalry and excludability, which are critical for understanding the commons problem, and offers a framework for valuing the issue and finding workable policy solutions. Notwithstanding the nascent economic literature on this topic, some estimates of the cost of the space debris problem are reviewed and potential policy solutions are analyzed.