Download this Paper Open PDF in Browser

Earth Orbit Debris: An Economic Model

25 Pages Posted: 15 May 2013  

Nodir Adilov

Indiana University Purdue University Fort Wayne - Department of Economics

Peter J. Alexander

Federal Communications Commission

Brendan Michael Cunningham

Eastern Connecticut State University; U.S. Naval Academy

Date Written: May 14, 2013

Abstract

Space debris, an externality generated by expended launch vehicles and damaged satellites, reduces the expected value of space activities by increasing the probability of damaging existing satellites or other space vehicles. Unlike terrestrial pollution, debris created in the production process interacts with firms' final products, and is, moreover, self-propagating. Collisions between debris or extant satellites creates additional debris. We construct an economic model to explore private incentives to launch satellites and to mitigate space debris. The model predicts that, relative to the social optimum, firms launch too many satellites and under-invest in debris mitigation technologies. We discuss remediation strategies and policies, and calculate a socially optimal Pigovian tax.

Keywords: satellite, debris, pollution, externality, space, collision

Suggested Citation

Adilov, Nodir and Alexander, Peter J. and Cunningham, Brendan Michael, Earth Orbit Debris: An Economic Model (May 14, 2013). Available at SSRN: https://ssrn.com/abstract=2264915 or http://dx.doi.org/10.2139/ssrn.2264915

Nodir Adilov

Indiana University Purdue University Fort Wayne - Department of Economics ( email )

Department of Economics
Doermer School of Business
Fort Wayne, IN 46805
United States

Peter J. Alexander (Contact Author)

Federal Communications Commission ( email )

Washington, DC 20554
United States

Brendan Michael Cunningham

Eastern Connecticut State University ( email )

Willimantic, CT 06226
United States

U.S. Naval Academy ( email )

Department of Economics
589 McNair Road
Annapolis, MD 21402
United States
410-293-6894 (Phone)
508-302-2596 (Fax)

Paper statistics

Downloads
618
Rank
34,654
Abstract Views
2,922