Near-Earth space governance is all about the money
“Rules of the road” to maximize US competitiveness in the emerging space economy
by Adam Routh
|New agreements should be made on a bilateral, or very limited multilateral, basis. Equally important, they should be specific enough that they can evolve in step with the near-Earth space economy.
Inadequate governance arrangements threaten to hamstring the ability of the US to capitalize on this growth. The proliferation of space debris could deny US and its allies access to critical orbits. At the same time, domestic regulation of dual-use space technology undermines commercial growth and the very international cooperation needed to reap the domain’s full economic potential. International agreements designed to govern space activities do exist, but they are often outdated and fail to account for many new space activities and challenges. To fully realize the economic value of near-Earth space, the US government should prioritize development of new governance measures that empower the commercial space sector.
New agreements should neither seek to unify international consensus nor attempt to address all new activities and challenges at once. Decades of stalled efforts have proven multilateral space agreements are simply too difficult to develop. Instead, new agreements should be made on a bilateral, or very limited multilateral, basis. Equally important, they should be specific enough that they can evolve in step with the near-Earth space economy. Initial agreements based on this framework should seek to address the most pressing issues threatening to constrain commercial development, like space traffic management, space debris, and dual-use technology regulatory reform. The history of international law shows that economic interests can be persuasive in international law development. The US should act now to develop new international agreements based on the emerging economic value of near-Earth space.
The space economy comprises space launch, satellite services, and the manufacturing sector which produces the relevant rocket, satellite, and ground segment components. Today, commercial satellite services providing communications, navigation, television, imagery, and other services represent $329 billion of the $415 billion global space economy, according to one assessment. Indeed, some satellite services, like global navigation systems, have become so diverse and ubiquitous in the daily lives of people all across the globe that the precise economic benefit is hard to measure. And while the space sector is small compared to others, space plays an indispensable role in the global economy as a whole. In fact, the globe’s highest grossing economic sectors, such as agriculture, mining, transportation, information technology, finance, and insurance, all rely on space systems.
The near-Earth space economy is poised for dramatic growth, creating new economic opportunities for American and allied companies and investors. That growth is being driven by a series of technological advances that make space more accessible and more usable. For example, advances in launch reusability are driving down launch prices while advances in satellite technologies are dramatically reducing the overall size and cost of satellites. Business models spurred by these innovations are still being validated, but near-Earth space will be critical for emerging services expected to reshape the global economy, like fifth generation (5G) telecommunications and other Internet of Things services.
The US, the European Union, Japan, and India are beginning to pay more attention to the near-Earth space economy. So, too, are US competitors in Beijing and Moscow. Nor is interest in near-Earth space restricted to government actors. Indeed, commercial actors like SpaceX, Planet, and OneWeb are key players driving growth. This is because such companies are often able and willing to assume more risk and innovate faster than their government counterparts.
|Capturing the full value of near-Earth space will require more than the right technological investments and advances.
This renewed focus on the near-Earth space economy suggests recent space innovations are likely just the beginning. Separate studies conducted by financial firms Goldman Sachs, Morgan Stanley, and Bank of America Merrill Lynch found the space economy could reach between $1 trillion and $2.7 trillion by the 2040s. At $2.7 trillion dollars, the space economy would be roughly the size of today’s civil aviation sector. Put differently, it would be larger than the 2017 gross domestic product of the United Kingdom. Or at $1 trillion, it would be roughly half the size of the global car and automobile manufacturing industry.
That growth will be driven by three types of innovation. First, governments and companies will derive value from enhancing existing services, like the delivery of broadband Internet from satellites. Second, they will be able to generate value through new services altogether, such as on-orbit satellite rendezvous and servicing operations, which can repair, improve, or extend the life of satellites. These types of services would directly impact the millions of Americans who rely daily on current satellite services such as GPS, weather data, earth imagery, and more.
Third, in the medium to long term, technological advances could unlock markets that today seem the stuff of science fiction. States and companies are already investing in artificial intelligence, robotics, novel forms of communications, energy transfer and reception, and other capabilities needed to engage in space-based resource exploitation, harness space-based solar power to provide inexhaustible energy reserves, and establish the larger, more stable extraterrestrial human presence necessary for exploring the Moon, Mars, and beyond.
The US has begun investing in many of these areas. So have China, Japan, Russia, and numerous private companies. The development of space will not just benefit developed countries alone, either. As the International Telecommunication Union notes, for instance, satellites could provide underserved markets with the cost-effective broadband communications needed for a host of economic development processes.
Capturing the full value of near-Earth space will require more than the right technological investments and advances, though. It will also require the United States, along with its allies and other countries, to create a new system of space governance that encourages cooperation and the sustainable commercial development of near-Earth space.
Realizing the full economic potential of near-Earth space is not inevitable. Standing in the way is mounting space debris and the restrictive regulation of dual-use space technology. Together, debris threatens existing space systems while a lack of international cooperation over dual-use technology concerns frustrates commercial sector growth. To realize the economic potential of space, countries and companies must overcome these challenges.
Near-Earth space is at risk of becoming another “tragedy of the commons.” After decades of use, critical Earth orbits, like low, medium, and geosynchronous orbits, are riddled with destructive space debris. Human-made debris alone comprises everything from old satellites and their components to paint flakes and fragments from satellite collisions. Traveling at orbital velocities, debris of any size poses significant risk to active space systems. Moreover, as on-orbit collisions occur, a self-sustaining cascading effect can ensue, causing ever more collisions and compounding the amount of debris.
With hundreds of thousands of pieces of space debris in orbit currently, a limited ability to track debris and share data globally, no current means of actively removing any of it, and models predicting the amount of debris will grow, the issue of space debris threatens to foreclose the use of near-Earth space for all actors. It is not an exaggeration to suggest we could lose access to primary Earth orbits. In fact, a 2013 Inter-Agency Space Debris Coordination Committee (IADC) study assessing the stability of low Earth orbit confirmed that without active debris reduction, the orbit would be overburdened with debris in 100 years, rendering it unusable.
|International cooperation is ultimately necessary to solve the problem of space debris. Unfortunately, existing governance arrangements are not up to the task.
The US would have the most to lose should near-Earth space be rendered inaccessible due to space debris. In terms of both active satellites and economic investment in space systems, the US is currently the leading spacefaring nation. Without a solution, the US would face some of the most serious economic consequences from the loss of near-Earth space to debris.
International cooperation is ultimately necessary to solve the problem of space debris. Unfortunately, existing governance arrangements are not up to the task. Internationally, political deadlock has left the United Nations unable to pass formal treaties on the issue, leaving it to address space debris through voluntary guidelines. Several government and non-government organizations have also promulgated best practices and guidelines for the mitigation of space debris, but the guidelines are voluntary and significant prescriptive differences exist among them. Perhaps the most influential debris mitigation guidelines are those provided by IADC. While IADC’s guidelines are a helpful step, enough debris exists currently that debris collisions—which create more debris—are still expected. Some states and organizations, like the US and European Union, require that space systems incorporate debris mitigation measures, such as deorbiting systems that remove a satellite from orbit, before granting national regulatory approval. National regulatory requirements for debris mitigation are not shared by all spacefaring nations, however.
Active debris removal is also necessary to solve this problem, and here, market solutions might help. Companies like the Japanese startup Astroscale believe there is a market for active debris removal services. But Astroscale and other similar companies must overcome technical hurdles before they can actually provide these services. Insurance companies could also help to reduce space debris in the near term by citing increased debris risk to space systems as an insurance policy interest. Insurers could even develop best practices and price policies against companies’ adherence to those practices. The role of insurers should also be expected to expand as human spaceflight activities increase for commercial and civil purposes.
The dual-use problem is a regulatory issue that addresses the fact that some space technologies are capable of both commercial and military functions. While governments are eager to control dual-use technologies for fear that these systems and services in the hands of adversaries will pose a risk to national security, global growth in the public and private space sectors has rendered current US dual-use regulations often ineffective and burdensome for the commercial sector. To develop the near-Earth space economy, the US government needs to reform dual-use regulations. These reforms should focus more on the end use of a technology or system, rather than on the hardware or user, and leverage international cooperation to develop shared “rules of the road” (standards, procedures, safety protocols, etc.) to safeguard national security interests. Without reforms, the US will likely cede leadership of the commercial space sector to adversaries who have more permissible regulatory environments, and therefore, attract more companies.
Generally speaking, the dual-use categorization is a regulatory tool used by governments to describe and control an item that can serve both commercial and military uses. Possessing both commercial and military value, these items or systems can be of critical economic or military interest to a government. According to the US Department of Commerce, the dual-use label applies to a host of technologies and regulatory requirements are “dependent upon an item’s technical characteristics, the destination, the end-use, the end-user, and other activities of the end-user.” Once an item or system is categorized as dual-use, states can then control—often through import and export controls—how, when, and to whom these items can be transferred. States choose to classify items as dual-use for several reasons, but broadly, the dual-use label reveals a state’s concerns about competitiveness, innovation, market access, and national security.
|Without cooperation, shared norms are not developed to any meaningful extent, resulting in confusion over what is or is not acceptable behavior in space.
Most space technologies and services can support both commercial and military purposes. Whether it is a commercially built rocket deploying a secret government satellite, a commercial satellite hosting a national security payload, a government buying commercial satellite services during peace or wartime, or space systems labeled as commercial but controlled by a government, the line between purely commercial and purely military space systems can be hard to draw with any sort of confidence. Without confidence about which space systems can pose a threat or enable one’s adversaries, countries often err on the side of caution by controlling how they allow their space technology to be traded or used internationally.
The way the US currently chooses to control dual-use space technology is increasingly ineffective at preventing their proliferation, however. Existing US regulations control everything from individual components and software to whole systems. According to the Bureau of Industry and Security within the US Department of Commerce, global navigation satellite systems equipment, components, and signals decryption software; imaging satellites; satellite propulsion; launch vehicle propulsion system components/structures, including the rocket, software, and propulsive substances; satellite communications equipment technology; satellite receivers; commercial communication satellites; satellite thrusters; and a host of other relevant space technologies are listed in the Commerce Control List, identifying them as dual-use technology. In addition to the hardware, current US regulations also require a detailed evaluation of the technology’s end user, end use, and other factors. This regulatory structure provides US government agencies ample opportunity to limit the commercial sale of American space goods and services internationally. While it may effectively control the flow of US space technology, it is not effective at controlling how other countries trade or sell similar systems.
The dual-use label can make it more difficult for US adversaries to acquire space technology, but it does not make it impossible. Other developed countries do produce and sell space technologies and services without concern for US interests. China, for example, sells satellites and provides space services to a handful of countries, and many of these sales conflict with US interests. US regulatory measures, like the dual-use label, are not capable of suppressing an increasing global demand for space capabilities. Internationally, access to space systems will become more common regardless of America’s desires to control them.
Current US regulatory practices also limits international cooperation. Restricting access to space systems means states are communicating very poorly, if at all, about how to use these items. Without cooperation, shared norms are not developed to any meaningful extent, resulting in confusion over what is or is not acceptable behavior in space. For instance, there are no internationally agreed-upon rules for how close one satellite can maneuver in proximity to another. Yet the technology exists, satellites can and do maneuver in close proximity to others, and developing near-Earth space will require even more proximity operations. The same lack of rules also impacts military considerations by making it unclear which behaviors are threatening or not. Without rules it is also difficult to hold actors accountable. Collectively this normative confusion leads to insecurity over the use of dual-use technologies and perpetuates a government’s desire to control them.
Fortunately, fears about new technologies being used maliciously are neither new nor unique to the space sector and, importantly, they can be overcome. Civil aviation, for instance, was initially hamstrung by similar reservations. Prior to the signing of the Chicago Convention in 1944, many states felt aviation should not be commercialized because planes would always possess a military functionality. It was not until international “rules of the road” were created and agreed upon by the international community (i.e. the Chicago Convention) that civil aviation was able to take off at a global scale. Space is no different.
From a regulatory perspective, overcoming fears of dual-use space systems would require loosening regulatory restrictions on individual items and systems and instead focusing more on how the end item or finished system is used. It would also necessitate the US working with allies and partners to develop international agreements to outline rules of the road for space activities. For perspective, through shared rules of the road for civil aviation, authorities can examine a plane’s use (e.g. flight path, speed, altitude, radio calls, etc.) against shared norms and practices to assess its intent and determine if the dual-use technology poses a threat. Through shared civil aviation norms, the concern posed by planes as dual-use technologies is mitigated significantly, allowing commercial aviation to occur internationally and at scale.
Domestic regulatory reforms and international rules of the road for space activities can help overcome the dual-use problem. With safeguards in place to mitigate threats from dual-use space technology, US commercial space companies can gain access to larger international markets. This is especially the case for the U.S. vis-à-vis China and Russia given the centralized economic systems championed by Beijing and Moscow and the fact that the US has more allies and partners with advanced space sectors, like European countries, Japan, and Australia. International space agreements do exist, but the current regime is not suited to advance new rules of the road for space activities.
The circumstances surrounding the development of space are both complex and rapidly evolving. Yet, global space governance remains a product of the Cold War. The dated nature of existing treaties often leaves many new space activities unaccounted for or allows actors to operate under wide-ranging interpretations of existing agreements. Attempts to improve governance are not uncommon, but diplomatic impasses between international actors have prevented progress. The result has limited spacefaring nations’ abilities to sustainably develop space.
|The preference to develop domestic policies over international agreements reflects both the emerging value of commercial space and the stagnation of international space governance.
During a brief period of US-Soviet détente in the 1960s and 1970s, the UN produced five multilateral agreements to govern space activities. Of the five international agreements, the Moon Treaty (1979) has too few signatories to be effective, while the Outer Space Treaty (1967), Rescue Agreement (1968), and Liability and Registration conventions (1972 and 1974 respectively) require substantial clarification in order to apply many of their principles to new space activities and issues, such as in-orbit satellite rendezvous and servicing operations, space traffic management, tourism, or space debris mitigation. Countries have attempted to improve or complement these agreements over the years but no new multilateral agreements have been produced since the 1970s.
At a time when new governance is needed, international organizations like the UN Committee on the Peaceful Uses of Outer Space (COPUOS) created to advance international space governance, are failing to do so. The UN and the various offices charged with promoting international cooperation in space are often slow to action, limited in authority, and bogged down by political deadlock. States continue to pursue new multilateral space governance, nevertheless.
Spacefaring nations continue to propose new policies to address evolving uses of space in the UN General Assembly, the UN Conference on Disarmament, and COPUOS. Few proposals, however, address the commercial development of space, and conflicting state priorities related to transparency measures or economic and military interests stall most efforts. A set of 21 guidelines for the long-term sustainability of outer space activities and a nonbinding Code of Conduct for Outer Space Activities have both received passive support from various states and private actors. The UN General Assembly has also adopted resolutions, on a non-binding basis, that address satellite TV, remote sensing of the Earth, and nuclear power sources in space, among others. To be sure, multilateral efforts have not proven completely effective and more is needed to provide order as new space interests are pursued.
In response to recent failures to advance new international agreements, the development of national space policies is on the rise, and with an emerging focus on the commercial space sector. Without a doubt, the maturation of the commercial space sector has proven to be the greatest change since the groundwork of international space governance was laid in the 1960s and 1970s. This growth has allowed commercial interests to receive greater prioritization as new national policies are developed. Although prioritized less than national security (i.e. military) or civil (i.e. science and exploration) space policy, commercial space has begun to emerge as a third component in national space policy strategies.
The preference to develop domestic policies over international agreements reflects both the emerging value of commercial space and the stagnation of international space governance. The US and Russia stand apart from other nations, as they have the most robust set of national laws and regulatory organizations designed with international space commitments in mind. But among the 28 nations with domestic space policies, there is little policy convergence.
States’ decisions to develop unilateral space policies with little concern for international cooperation is creating more limitations than benefits. Failing to cooperate only aggravates existing policy confusion, stalling the development of commercial space activities. Prominent examples include satellite servicing operations and space traffic management, both of which hold significant economic value but cannot be fully developed without improved cooperation due to their need for shared norms and best practices, much in the same way civil aviation could not function effectively if states did not agree on norms and best practices for air traffic control or flight safety. As a global commons, if the goal is to fully take advantage of the economic value of near-Earth space, then unilateral national policies cannot replace international agreements.
Current trends suggest that the number of space actors and their interests will increase over the coming years. As a consequence, competition over the utilization of space will likely expand and intensify with more actors pursuing their interests and disagreements becoming more common. Current international space governance will not be able to handle the changing nature of space development. New governance, structured differently, is needed.
The US should take a leading role in the development of new space governance to stay ahead of adversaries in the economic development of near-Earth space. Policies should focus on creating functionally specific and agile bilateral agreements between like-minded allies and partners that can advance emerging commercial space activities and ensure the preservation of the near-Earth space environment. The US, with its allies and partners, can begin an incremental process of developing new rules of the road for space activities necessary to sustainably mature the most near-term and economically lucrative space activities. This approach would overcome the stalemate present in COPUOS, and more importantly, initial bilateral agreements between leading countries have historically had the ability to influence broader global governance behavior.
|By individually focusing new bilateral agreements on specific economic activities, like space situational awareness, space traffic management, space debris, and eventually commercial activities, there is opportunity to mitigate political deadlock and advance a new system of international space governance.
First, the US should ensure its own regulatory house is in order. The Secretary of Commerce should continue pursuing a consolidation of regulatory authorities within the US Department of Commerce, a task guided by Space Policy Directive 2. In the same line of effort, the US Congress should pass legislation that would solidify this consolidation. By consolidating regulatory authorities, the US government can reduce the bureaucratic and segregated rulemaking processes that often impedes commercial space activities. More broadly, this consolidation would help synchronize internal government agendas and allow the US to more effectively prioritize commercial space activities and promote their development.
Second, the US, with allies and partners, should develop agreements that outline rules of the road for space situational awareness and space traffic management. Improving space situational awareness and space traffic management can enhance information about objects in orbit and actors’ behaviors. With an improved understanding of activities in space, these new agreements would reduce some dual-use concerns, provide opportunities for more precise on-orbit operations, and eases fears related to orbital debris. Examples of space situational awareness cooperation currently exist through memoranda of understanding between the US Department of Defense and various countries and commercial actors, but an increasing amount of space activity is straining the Defense Department’s ability to provide safe and actionable data. More formal cooperation between the US and its allies and a partners is needed.
Third, the US should develop initial agreements with allies and partners to mitigate and reduce space debris. These initial policies should reflect both the need to preserve the space domain and that leading spacefaring nations are committed to doing so. New space debris agreements should follow guidance from leading space agencies and existing debris mitigation guidelines, be formalized as official treaties, and executed through national regulations. While a few spacefaring nations operating under limited international agreements will not be able to solve the issue of space debris completely, progress, even if limited, is needed. The economic value of space cannot be realized if space debris is not addressed, and debris cannot be addressed if states do not cooperate.
The structure of these new agreements should be based on functionally specific bilateral arrangements between like-minded allies and partners with a focus on the sustainable economic development of near-Earth space. By individually focusing new bilateral agreements on specific economic activities, like space situational awareness, space traffic management, space debris, and eventually commercial activities, there is opportunity to mitigate political deadlock and advance a new system of international space governance.
These agreements should not be expected to be perfect. Rather, initial agreements should be created with the understanding that they will likely have a short half-life because technology and new capabilities will continue to evolve quickly. While an agreement with the most complete solution would be ideal, recent attempts to develop comprehensive treaties have proven too difficult. Therefore, policymakers should embrace a more evolutionary approach for developing new arrangements by working with what they have now and acknowledging that changes and improvements will have to be made in the future. This arrangement framework is not new. In fact, this framework is what governs the $2.7-trillion civil aviation industry. Ultimately, the value of governance can be measured, in part, by its ability to evolve and adapt as its constituency changes and evolves overtime. Agile, ever-improving space governance should be the goal.
Successful bilateral agreements should be expanded or replicated as opportunities are presented. Some states will likely remain unwilling to participate in this new governance framework, but some up-to-date space governance is likely better than none at all and, over time, the US and other like-minded nations can use diplomatic and other incentives to persuade states to join broadly popular international agreements.
This governance framework will not likely be easy to achieve, and more research into this approach is needed. But the economic development of space is beginning to emerge like never before, drawing attention to the ineffectiveness of the existing governance regime and creating incentives to approach space governance in a new way. Economic interests can be influential in the development of rules providing effective governance of space. While economic interests are most often secondary to state security and sovereignty, they are highly pervasive in international law development. Therefore, the US should leverage the emerging economic value of near-Earth space to develop new governance that enables the commercial sector and ensures the preservation of the near-Earth space environment.
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