Space Law and Economics

Space Law: Main Principles

The legal framework for space activities is based on the 1967 Outer Space Treaty (OST) and four subsequent United Nations treaties implementing its provisions. 

The main principles of the treaty are summarized below.

With the latest trends in the space industry as the growing importance of private initiatives in the exploration of space, the main principles of the Space Law may be challenged as most of those principles were designed when space exploration was only the business of the states.

Space Law: Crimes in Space

Sometimes compared to the high seas, space belongs to everyone and to no one; hence, no country may lay claim to it. In legal terms, it is called Res Communis.

International law allows countries to assert jurisdiction outside their territory in several ways, including via the nationality principle, which covers crimes committed by a country’s citizens outside its borders, and the universality principle, which allows countries to prosecute anyone for serious crimes against international law, such as piracy.

As for the question of who prosecutes space crimes, the short answer is that a spacefaring criminal would generally be subject to the law of the country of which they are a citizen or the country aboard whose registered spacecraft the crime was committed, because the treaty grants that country authority “over any personnel thereof”.

However, the term “personnel” is not defined, and this raises questions as to what the case might be for private citizens, such as, for example, an Australian space tourist flying aboard a US-registered spacecraft. The visualization on the right highlights several issues related to space industries and space exploration which may cause legal debates in the near future.

Space Law: Crimes in Space and Space-Related Crimes

In 2019, Anne McClain, a NASA astronaut, was accused of committing a crime in outer space. She was charged with accessing the bank accounts of her former spouse without her authorization. 

An investigation subsequently cleared the astronaut Anne McClain of wrongdoing. Her former spouse, Summer Worden, was charged with lying to federal investigators.

Due to the unprecedented nature of the case, it raised a number of questions, one of them being whether records of Ms. McClain’s Internet usage in space could be presented in court to help aid in Ms. Worden’s defense. With space becoming more accessible, cases like this can become more commonplace in the future.

Number of Launches
Every Rocket Launch that Successfully Carried a Payload into Orbit (Categorized by Owner)

“New Space” is a concept describing the current trends in the space industry when the field, once dominated by the public and military agents, opens up for private initiatives.

Technology improvements reduced the cost of producing rockets, making it possible for startups to enter the space industry.

That makes private companies the driver of the space race, contrary to the “old space” when space exploration was lead by military and civil organizations.

Government/Private Space Exploration Timeline
JPL Mission History

Launch dates of the more than 100 missions that JPL has either managed or participated in (1958 -- 2019)

Sharing and Regulating Space Orbit

The increased and more diversified space traffic caused cheaper and simpler satellite technologies to lead to more crowded traffic in the Earth’s orbit. If unregulated, it may lead to a situation where the strongest can take an unfair advantage, monopolizing the use of the orbit.

Those regulations should apply to Low Earth Orbit (LEO),  to develop and enforce current regulatory framework to manage the increasing “space traffic” to prevent interferences or collisions between assets of different operators, as well as to Medium (MEO) or Geosynchronous Earth Orbit (GEO) and interplanetary exploration and exploitation.

New regulations should be implemented in respect to established treaties and principles as the “Outer Space Treaty” or the “Convention on International Liability for Damage Caused by Space Objects”.

In the areas with already developed and followed regulatory framework, like the satellite telecommunication sector, it is important to stay abreast of technology progress and market evolution.

At the same time, the development of rules and regulations must be mitigated to avoid unnecessary red tape stifling new enterprises, and space law should preserve the freedom to generate new ideas and implement new applications.

Sharing and Regulating Space Orbit

According to the 1967 Outer Space Treaty (OST), outer space, including the Moon and other celestial bodies, “is not subject to national appropriation by claim of sovereignty”. However, the OST could be the biggest obstacle to one of the most promising new frontiers of space exploration: asteroid mining.

In 2015, the US government made an attempt to update the law on space mining, producing a bill that allows companies to “possess, own, transport, use, and sell” extra-terrestrial resources without violating US law. That move boosted the space mining industry in the US. However, steps like that may fuel international conflicts if the rules are not be discussed between different stakeholders represented by states and companies.

It also calls into question the principle of the OST which states that “the exploration and use of outer space shall be carried out for the benefit and in the interests of all countries and shall be the province of all mankind”.

These issues can become even more pronounced once the space economy becomes more self-dependent. At the moment, the vast majority of space enterprises aim to satisfy the needs of humans on Earth. However, once the share of the space economy aimed at satisfying the needs in space (e.g. extracting water and resources on the Moon for the needs of lunar settlements) grows, new regulations will be required.

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Sharing and Regulating Space Orbit

The Luxembourg Case

The tiny European country of Luxembourg has set itself an ambitious goal of becoming Europe’s hub for space mining. Being one of the EU’s wealthiest nations, it has a well-developed space industry, which plays a significant role in the development of satellite communications.

The Luxembourg government has put in place a legal framework necessary for exploiting space resources. Passed in 2017, it says that private companies can be entitled to the resources they mine in outer space, but they can’t own celestial bodies. In addition, the country’s government announced its plans to create the European Space Resources Innovation Centre (ESRIC) and open a $225 million line of credit for space companies intending to set up their European HQs in the country. As of now, Luxembourg has invested in Planetary Resources, collaborated with Deep Space Industries, Ispace and other companies. The country’s Space Agency actively participates in international space programs, such as Artemis, International Space Exploration Coordination Group and others. 

What makes the Luxembourg case unique is that it has set a precedent of a government creating incentives for private space companies, including those of them that specialize in space mining. In addition to its space program.

The global space mining market is expected to grow at a CAGR of 23.7% over the forecast period 2020 to 2026.
Outer Space Mining

Experiencing a rapid growth and decline in the 2010s, the space mining industry was dominated by Planetary Resources and Deep Space Industries, two competing startups founded in 2012. 

NASA-funded research into asteroid-mining; the Colorado School of Mines offered an asteroid-mining degree program; Senator Ted Cruz predicted that Earth’s first trillionaire would be made in space.

By the end of the decade, both companies struggled to secure funding. In 2018, Planetary Resources was acquired by ConsenSys, a blockchain software company.

 

Companies like OffWorld, Moon Express and ispace continue developing mining and robotics technologies, thus laying a foundation for space mining in the long term.

Space Mining: Leaders

Tokyo, Japan, 2010

Founded in 2013, Ispace Technologies is a space resource exploration company specializing in developing micro-robots capable of locating resources necessary to extend human life into outer space. Their main focus is to locate, extract, and deliver lunar ice to customers in cis-lunar space. Ispace was awarded with two out of four contracts by NASA to collect lunar resources for NASA’s Artemis program.

Cape Canaveral, Florida, US, 

2010

Moon Express develops a robotic spacecraft for low cost missions beyond the Earth, including the Moon, asteroids, and Mars. The company has signed a contract with NASA for lunar cargo delivery; NASA has also selected Moon Express as a partner in developing lunar landers to put the U.S. back on the surface of the Moon.

Pasadena, California, US, 2016

OffWorld is developing a learning robotic workforce for heavy industrial jobs on Earth, Moon, asteroids and Mars. The company’s vision is to develop and test robotic workforce for difficult Earth environments so it could be used in the outer space. 

Redmond, Washington, US, 2010

After raising $50 million in 2016, Planetary Resources became one of the most promising space mining startups. In 2018, it was acquired by ConsenSys, a blockchain technology company. 

San Jose, California, US, 2012

Originally founded to pursue asteroid mining, DSI has shifted its focus lately toward small-sized satellites. It was acquired by Bradford Space in 2019. 

 

Space Debris on the Orbit and Emerging Anti-satellite Weapons Threat

The US Space Surveillance Network has eyes on:

 

Earth’s orbit already contains approximately 4,000 Whipple shields, which makes flights more challenging. Mission control avoids dangerous paths; however, its tracking systems aren’t that perfect.

All this traffic can potentially lead to a disaster. In 2009, Iridium, a US commercial satellite crashed into Cosmos-2251, an active Russian communications satellite. As a result, thousands of new pieces of space debris were created which are now threatening other satellites in low Earth orbit - an area stretching up to 2,000 kilometres in altitude. Altogether, there are roughly 20,000 human-made objects in orbit, from working satellites to small shards of solar panels and rocket pieces.

“Putting decommissioning programs in 90 percent of new launches will prevent the Kessler syndrome when one collision leads to more collisions until there’s so much crap up there, no one can fly at all. That might be a century hence—or a lot sooner if space war breaks out. If any country starts blowing up enemy satellites, “it would be a disaster,” says Holger Krag, Head of the Space Debris Office at the European Space Agency. 

 

Due to the 2009 satellite collision and China's destruction of its Fengyun-1C weather satellite during an anti-satellite missile test in 2007, the amount of space debris has increased sharply in recent decades. On March 27, 2019, India announced the successful completion of an anti-satellite missile test. That resulted in the creation of a new cloud of space debris consisting of at least 400 pieces, which increased the risk of impacts to the ISS by an estimated 44 percent over a 10-day period.

Planetary Defense

Near-Earth Objects, such as asteroids or comets, can pose a significant threat to Earth and earthlings. Although smaller objects, such as meteors, hit our planet daily and mostly burn up whilst traveling through its atmosphere, some larger objects can survive and hit the Earth's surface with significant energy. Fortunately, the probability of these events is very low; however, their consequences can be disastrous and, therefore, require the development of mitigation strategies. All major space organizations, such as NASA and ESA, pay a lot of attention to this issue; the UN has also taken steps in this regard by establishing the International Asteroid Warning Network and the Space Mission Planning Advisory Group (SMPAG)

However, because this is a global threat, a greater level of international coordination and integration is necessary to produce an effective response. The world cannot afford a disorderly and fragmented response, such as the one we have seen during the previous and current global crises (e.g. the COVID-19 pandemic). Apart from improving detection capabilities and increasing accuracy of impact predictions, the development and testing of methodologies and technologies for deflecting a large object (the most realistic and effective method of intervention to date) have to progress to a point when they can be confidently deployed and ensure a high success rate.

Space Exploration and Space Travel: Pros and Cons

Pros: The benefits of space exploration can be direct or indirect. Direct benefits include the generation of scientific knowledge, diffusion of innovation and creation of markets, the inspiration of people around the world, and agreements concluded between countries engaged in space exploration. Indirect benefits include tangible enhancements to the quality of life over time, such as improved economic prosperity, health, environmental quality, safety, and security. They also include intangible (philosophical) benefits, such as a more in-depth understanding and new perspectives on humankind’s place in the Universe. Possibilities for benefit creation multiply rapidly when the products of space exploration interact with the imagination and creativity present in other fields of endeavor.

Cons: Space exploration programs require large financial resources. Hence, the question that arises here is: Which is more rational: to allocate those resources to the space industry or use them to solve problems on Earth? Opponents of space exploration claim that exploring space is a luxury humanity can ill afford. Therefore, instead of wasting time and effort on ‘prestige-only’ space exploration projects, humanity should focus on solving problems on Earth.

SpaceTech can greatly improve lives of people on Earth (e.g. cheap satellites can provide Internet to people in rural areas or prevent the spread of agricultural diseases). However, more demanding programs, such as missions to other planets, may be seen as unreasonable, especially when they are part of public programs.