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The economics of satellite deorbiting performance bonds

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  • Adilov, Nodir
  • Alexander, Peter J.
  • Cunningham, Brendan M.

Abstract

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.

Suggested Citation

  • Adilov, Nodir & Alexander, Peter J. & Cunningham, Brendan M., 2023. "The economics of satellite deorbiting performance bonds," Economics Letters, Elsevier, vol. 228(C).
    • Handle: RePEc:eee:ecolet:v:228:y:2023:i:c:s0165176523001751
    DOI: 10.1016/j.econlet.2023.111150
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    References listed on IDEAS

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    Cited by:

    1. Akhil Rao & Mark Moretto & Marcus Holzinger & Daniel Kaffine & Brian Weeden, 2023. "OPUS: An Integrated Assessment Model for Satellites and Orbital Debris," Papers 2309.10252, arXiv.org.

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    More about this item

    Keywords

    Tradeable performance bonds; Satellite deorbiting; Economics of satellites; Economics of space; Orbital debris;
    All these keywords.

    JEL classification:

    • L5 - Industrial Organization - - Regulation and Industrial Policy

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