Environmental and Resource Economics

, Volume 60, Issue 1, pp 81–98 | Cite as

An Economic Analysis of Earth Orbit Pollution

  • Nodir AdilovEmail author
  • Peter J. Alexander
  • Brendan M. Cunningham


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 a formal 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 choose technologies which create more debris than is socially optimal. We discuss remediation strategies and policies, and demonstrate that Pigovian taxes can be used to internalize the debris externality.


Orbital debris Economics of space Space pollution 



We are indebted to David Sappington, Donald Kessler, Bill Gibson, Michael Ash, Nicholas Johnson, Scott Pace, Brian Weedon, Henry Hertzfeld, Heidi Garrett-Peltier, James Boyce, Ceren Soylu, Kevin Crocker, Jerry Duvall, and the seminar participants in the Environmental Working Group, PERI Institute, University of Massachusetts, Amherst, for their useful comments on early drafts.


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Copyright information

© Springer Science+Business Media Dordrecht 2014

Authors and Affiliations

  • Nodir Adilov
    • 1
    Email author
  • Peter J. Alexander
    • 2
  • Brendan M. Cunningham
    • 3
  1. 1.Indiana University-Purdue UniversityFort WayneUSA
  2. 2.Federal Communications CommissionWashingtonUSA
  3. 3.United States Naval AcademyAnnapolisUSA

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