The economics of satellite deorbiting performance bonds

The rapid accumulation of orbital debris, coupled with the exponentially increasing number of satellites in certain regions of orbital space, impedes and may preclude long-term utilization of these resources. While voluntary satellite deorbiting guidelines are demonstrably ineffective in incentivizi...

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Bibliographic Details
Published in:Economics letters 2023-07, Vol.228, p.111150, Article 111150
Main Authors: Adilov, Nodir, Alexander, Peter J., Cunningham, Brendan M.
Format: Article
Language:English
Subjects:
Economics of satellites
Economics of space
Orbital debris
Satellite deorbiting
Tradeable performance bonds
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Summary:The rapid accumulation of orbital debris, coupled with the exponentially increasing number of satellites in certain regions of orbital space, impedes and may preclude long-term utilization of these resources. While voluntary satellite deorbiting guidelines are demonstrably ineffective in incentivizing firms to deorbit their expended satellites, we suggest interest-bearing deorbiting performance bonds provide an incentive mechanism that has minimal effect on firms’ operating costs. Not only would this type of bond reduce the rate of growth in orbital debris, these bonds could be tradeable, thus establishing market prices for certain types of orbital debris, both stimulating the market for active debris removal and further encouraging investments in satellite robustness. •We analyze the economic effects of satellite-deorbiting performance bonds.•Performance bonds offer effective deorbiting incentives.•Performance bonds create tradeable assets and establish market prices for debris.•Performance bonds may stimulate the active debris removal market.
ISSN:0165-1765
1873-7374
DOI:10.1016/j.econlet.2023.111150