Below is an another extended excerpt from my work-in-progress “Outer Space Auctions“; I have placed my scholarly citations below the fold:

The main sources of law that govern human activities in outer space include the 1967 Outer Space Treaty,[1] the 1972 Liability Convention,[2] and the 1979 Moon Treaty.[3] These treaties were originally drafted during the height of the Cold War and the space race between Russia and the United States. Among other things, Article II of the Outer Space Treaty prohibits “the national appropriation of outer space by claim of sovereignty, by means of use or occupation, or by any other means.”[4] As a result of this legal framework, outer space is governed as an open-access commons or res communis under international law.[5]

What does it mean to declare that outer space is not subject to national appropriation by any means?[6] Although the precise meaning of this provision has been discussed for decades,[7] it can be read as requiring outer space, including Low Earth Orbit, to be treated as an open-access commons. Broadly speaking, a “commons” refers to a public resource that is owned or used collectively by a group of individuals or firms. Traditional examples include public parks, fisheries, and grazing lands, but a commons can include any shared resource, including a public road, Wikipedia, or outer space (e.g. Low Earth orbit or LEO). Roman law, for example, distinguishes between res communis, property that cannot be used by all but cannot appropriated by anyone, such as the air and bodies of water, and res nullius, “property of no one” that can be appropriated through capture or use.[8] Likewise, international law recognizes two categories of open-access areas: terra nullius and res communis omnium.[9] Resources classified as terra nullius may be acquired by first possession.[10] By contrast, resources classified as res communis omnium, such as the high seas,[11] the deep seabed, and outer space,[12] are open for access and use to all.[13]

Given this legal framework, the increase in space congestion in Low Earth Orbit should come as no surprise, for in the absence of effective methods of shared governance open-access commons are often overused and overexploitated.

The “tragedy of the commons” refers to a situation where private individuals and firms over-exploit or overuse a shared resource.[14] Perhaps the most well-known example of a tragedy of the commons is overfishing.[15] If every fisherman in a community is free to catch as many fish as they want, they will likely continue to fish until the fish population is depleted, even if it means that they will no longer be able to fish in the future. Each fisherman only considers his own short-term gain, rather than the long-term sustainability of the fishery as a whole. As a result, the fishery may collapse, leading to a loss of income for fishermen and an ecological disaster.

In an open-access commons, each individual user obtains all the benefits from their own use of the shared resource but does not bear the full cost of the damage caused to the resource. Without some ground rules to limit the use of the resource, open-access commons can produce perverse overuse incentives, leading to its eventual destruction. As it happens, this same logic also applies to outer space today. Access to and use of Low Earth Orbit is not subject to strict regulation or coordination. Private companies and governments are launching more and more satellites for commercial, military, and scientific purposes, without necessarily considering the impact on others or the sustainability of the Low Earth Orbit region. There is also a lack of effective mechanisms for removing space debris from orbit, which further exacerbates the problem.[16]

The tragedy of the commons in outer space poses a significant threat to our increasingly interconnected world, as satellite systems are crucial for communication, navigation, weather forecasting, and other applications. To avoid this tragedy, experts are calling for greater international cooperation, better regulations, and the development of new technologies to remove debris from orbit. None of these proposed solutions, however, are likely to produce positive results in the short term. Greater international cooperation appears to be a non-starter given the increasing hostility among the world’s leading powers: China, Russia, and the United States. “Better regulations” at the national level are likely to work in the absence of greater international cooperation. And last but not least, a technological solution to the space congestion/space debris problem does not yet appear to be feasible.[17]

The traditional solution to negative externalities involves either command-and-control or Pigovian taxes. Adilov et al. (2013), for example, model the problem of space debris as a negative externality. In summary, their model predicts that, relative to the social optimum, firms will launch too many satellites and will under-invest in debris mitigation technologies. In addition, they identify some remediation policies and calculate a socially optimal Pigovian tax. The main problem with the Pigovian approach is that the government must have sufficient knowledge of the externality problem it is trying to solve to set the Pigovian tax at the optimal amount.[18] This crucial information, however, is usually lacking.[19]

So, what is to be done? Because Low Earth Orbit must be treated as an open-access commons under the Outer Space Treaty of 1967, is there any viable solution to the tragedy of the outer space commons short of amending the treaty or replacing it with a new one? More to the point, what is the most cost-effective way of responding to the problem of space congestion and space debris without jeopardizing the benefits of innovation, new technologies, and space exploration?

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[1] The Treaty on Principles Governing the Activities of States in the Exploration and Use of Outer Space, including the Moon and Other Celestial Bodies. See Resolution No. 277 (XXVI) of the 21st session of the General Assembly of the United Nations (1966).

[2] The Convention on International Liability for Damage Caused by Space Objects. See Resolution No. 2222 (XXI) of the 1998th plenary meeting of the General Assembly of the United Nations (1971). The 1972 Liability Convention provides that states must pay victims compensation for damages caused by any nuclear-powered satellite, private or public, emanating from their territories.

[3] The Agreement Governing the Activities of States on the Moon and Other Celestial Bodies. See Resolution No. 34/68 of the 89th plenary meeting of the General Assembly of the United Nations (1979). The Moon Agreement, by contrast, declares space resources to be the common heritage of mankind and envisages the establishment of an international legal regime. To date, however, no spacefaring nation has joined the Moon Agreement.

[4] See Ristau et al. 2007.

[5] Paliouras 2014.

[6] See Article II of the Outer Space Treaty of 1967, which prohibits “the national appropriation of outer space by claim of sovereignty, by means of use or occupation, or by any other means.”

[7] See, e.g., Capruso 2018; Su 2017.

[8] See, e.g., Nicholas 1962, p. 130; Ruddy 1968; Ristau et al. 2007.

[9] See, e.g., Svec 2022, nn. 6 & 7; Klabbers 2017; Fenn 2017.

[10] See, e.g., Lavery 2019.

[11] See, e.g., Zwalve 2009.

[12] See, e.g., Collis 2017; Marchisio 2010.

[13] Ku 2012; Kish 1973.

[14] See generally Hardin 1968, 1998.

[15] See Gordon 1954.

[16] See David 2021.

[17] [INSERT SOURCES HERE]

[18] See, e.g., Coase 1960.

[19] Ibid.