Earth’s orbits have never been more crowded, with 9 500 operational satellites in early 2024.Most of them privately operated and concentrated in a small number of orbits. Growth is driven by the deployment of satellite broadband and hundreds of thousands of satellites could be launched in the next two decades. The 500-600 km orbital region poses traffic co-ordination challenges, with more than 4 000 active satellites and over 260 public, private and amateur/university operators from 51 countries. Some 66% of commercial satellites and 27% of government and military satellites are found at these altitudes.

The orbital environment is already polluted by more than 100 million pieces of debris from past space activities that not only pose a collision threat for active satellites but also generate additional debris when colliding with each other. In a worst-case scenario, high debris density could trigger an irreversible chain reaction of collisions, rendering certain orbits of great socio-economic value unusable. Mathematical models show that this tipping point may have already been reached in selected regions and that the debris population is now slowly growing. Policy action is therefore required to stabilise the orbital environment and ensure continued access to space for future generations.

This publication summarises the state of the art so far (Chapter 2) and provides new evidence. All satellites and space stations are exposed to space debris, but the risk of collision varies greatly. The total global value of economic activity at risk is estimated to be USD 191 billion with the bulk of the value concentrated in orbits at 500-600 km altitude. The orbits with the highest exposure to debris (at around 850 km altitude and 70-80 degrees inclination) are mainly occupied by publicly funded satellites, vital for scientific research, climate monitoring, weather forecasting and national security. Practically all the risk (97%) is associated with defunct objects, with two-thirds (65%) coming from spent rocket bodies.

The value of space infrastructure and its associated signals and data can be expressed in multiple ways. A Korean willingness-to-pay study assesses the value of public earth observation satellites at risk from space debris at USD 388.7 million over ten years for Korea, indicating not only the importance of the societal services provided by these satellites but also broad popular support to preserve essential public services and conduct space debris mitigation (Chapter 3). A Japanese study uses growth theory to explore how space technology contributes to economic growth in sparsely populated prefectures in Japan (Chapter 4). More qualitatively, an Italian survey finds that over half of its respondents from public bodies (72%), have used earth observation services to enhance the quality of their products and services, expand research and development capabilities and increase the efficiency of their production and service processes (Chapter 5). In contrast, European private sector users (in Chapter 6) often perceive a gap between the potential of satellite data and its practical utility in strategic product decisions. For many of these end users, exploiting satellite data products fully necessitates considerable investments in both resources and specialised skills.

National and international measures for debris mitigation have existed for several decades. However, compliance rates would need to approach 100% to reach desired outcomes, but in 2022 only 55% of satellites and 85% of rocket bodies respected orbit clearance recommendations. Additional measures are necessary to improve compliance. Several missions to actively remove debris from orbit are under development, but this solution is expensive and technologically and legally challenging.

Policy options for space sustainability include command-and-control regulations, incentive-based mechanisms and voluntary approaches.

• Incentive-based measures, such as launch and orbital taxes and performance bonds for post-mission disposal, could bring considerable long-term positive environmental outcomes and economic efficiency gains. However, there are questions about how binding measures could be introduced and co-ordinated, and how increased regulatory stringency would affect the growth of the space economy.

• The design of a fair and equitable fiscal measure compatible with national domestic tax systems and constitutional frameworks is further explored in this publication, where operators first pay a tax that is subsequently refunded upon evidence of compliance with a specific action (Chapter 7).

• Meanwhile, voluntary schemes will continue to play an important role in space activities, and good design is critical to ensure they are effective. Setting up a successful environmental rating system for space sustainability will rely on its recognition as a transparent, credible third-party rating body (Chapter 8). Furthermore, it would be important to combine it with other measures, e.g. packaging it with an insurance model and creating financial incentives such as access to corporate loans or public funding.

OECD research on the general effects of environmental regulations finds that they stimulate innovation, with overall minor negative impacts on the jobs and profits of regulated firms. Still, more research is needed to explore concrete applications of these findings to the space economy.

The growing body of evidence on the state of the space environment, the growing risks of collision in orbit and the wider impact of space debris incidents calls for responses from both public and private actors. International co-operation is essential to adapt the international legal framework to the threats facing the orbital environment. At the national level, existing measures should be used more extensively – a promising first step is the first-ever fine issued to a non-compliant US operator in 2023.

Future avenues of research could involve delving deeper into the effects of different policy options and exploring how specific objectives affect policy design; the interaction and effects of policy mixes for space sustainability; and how international and domestic administrative and legal arrangements may affect outcomes. The OECD Space Forum will continue supporting these efforts by producing economic evidence on these emerging policy themes and beyond.