APPLICATION OF RISK-ETHICALLY
ADJUSTED PIGOUVIAN TAXES TO SUBSIDIZE
THE REMOVAL OF ORBITAL DEBRIS

M. BONISSI

Corresponding Author: University of Eastern Piedmont (UNIUPO), Department of Economics and Business Studies, matteobonissiautore@gmail.com

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Introduction

This paper is intended to be an analysis report able to make readers evaluate the possibilities of implementing a specific taxation to finance orbital cleanup missions, starting from a summary analysis of the topic and analyzing a potential proposed solution.
The first chapter is aimed at an observation of the problem of space debris, focusing on the worst case of its evolution (Kessler Syndrome), and also contains a study of the types of financing currently applied to orbital clean-up missions. In this section, the creation of a supranational government body with the aim of financing space debris removal missions is also hypothesized, analyzing in an introductory way the structure and its probable functioning.
In the second chapter we will hypothesize the construction of a solution, applying a specific type of taxes (Pigouvian taxes) for the collection of funds aimed at solving the problem of space debris and the prevention of Kessler Syndrome.
In the third chapter, an analysis of a hypothetical scenario is carried out, in which the previously hypothesized international agency could exist nowadays, examining what its potential three-year budget (2020 – 2022) would be, in order to study the efficiency and effectiveness of such a governmental body, and to be able to hypothesize how many missions could be funded. Considering the difficulty in collecting such information about each mission, part of the database is estimated and approximate.

CHAPTER I

The space debris problem in detail

In the first part of this chapter, we will analyze the contemporary problem of space debris, starting from historical precedents and analyzing future risks. In particular, the threat will be briefly analyzed at a scientific-technical level, also underlining the characteristics and technical problems of the engineering solutions proposed so far, so as to be able to estimate the resources necessary to implement them. Kessler’s Syndrome will then be briefly analyzed, i.e. the worst-case scenario that humanity could face if the problem of orbital pollution is not addressed in time. This syndrome is so severe that it is cataloged as a potential event that could indirectly lead to the extinction of the human race.

Orbital Risks

Space debris is considered one of the main threats to space exploration, similar to cosmic radiation and solar flares (emissions of ionizing particles with the ability to disable impacted electrical and electronic systems).

Source: ESA

There are currently about 8,000 satellites in space, of which approximately seventy percent are still functional.
As of 03/03/2022, the European Space Agency’s (ESA) space debris monitoring office is tracking the presence of 29,860 monitored debris.
The estimated number of impacts, fragmentations, collisions and anomalous events has been calculated to be higher than 640 (six hundred and forty), with the latest update as of December 6, 2023.
The estimation of orbital debris, carried out by means of statistical models, is as follows:

• 36,500 objects larger than 10 centimetres.
• 1,000,000 objects between 10 and 1 centimeter in size.
• 130,000,000 objects ranging in size from 1 centimeter to 1 millimeter.

The number of debris smaller than 1 millimeter is currently impossible to estimate accurately, as it is not possible to identify and track such fragments. It is important to note that even debris smaller than 10 centimeters is extremely difficult to detect, and numerical estimation is made by analysis of debris clouds and statistical models based on the frequency of impacts.
The main threat of such debris, whatever its size, is mainly its high orbital velocity. Considering the kinetic energy formula (EC=1/2mV2), even objects of low mass possess a high energy, being mainly given by velocity.
To all intents and purposes, an impact in space would take place at very high speeds, called «Hypervelocity», greater than the orbital velocities of the reference body, in the case of the Earth approximately thirty kilometers per second.
At such speeds, impactors and impacted bodies undergo a liquefaction phase due to the enormous amounts of energy associated with the collision.
To date, there are technologies that allow us to limit the serious repercussions on the affected object, such as the «Whipple Shields», which are a series of spaced plates that allow energy to be dissipated on the impact of a body with each of the layers. The effectiveness of this technology, which to date is the best among those developed, is directly related to the number of layers and the distance between them: as these two values increase, the effectiveness of the protection increases. The problem with this technology, however, is that, like all passive protection techniques, it is advisable to use systems of small size and mass to access the space.
For this reason, the use of these protections is limited to the most important capsules and satellites, which however represent a small number of orbital bodies (active and not) present around our planet.

Kessler syndrome

In the event of an orbital impact, such debris can damage or destroy vital components of satellites and spacecraft, such as electronics, engines, tanks or life support systems.
This is extremely risky especially for manned missions, due to the risk to the lives of the capsule occupants. These threats are either direct (in the event of an impact with pressurized modules, where a violent and sudden depressurization could be generated) or indirect (in the event of an impact with mission-critical modules, such as engines).
A similar scenario is hypothesized as a key element of the sci-fi feature film entitled «Gravity» (2013), in which a crew of astronauts is hit by a «debris cloud», i.e. a localized formation of a large number of debris.
The risk of impacts, however, is not a science fiction phenomenon, it is a concrete event: in fact, the International Space Station has had to carry out on average more than one evasive maneuver per year to avoid risks to its crew. It is important to underline that the Station is often not moved, except to avoid extremely dangerous «clouds», as it is equipped to «absorb» many impacts of small bodies.
Orbital debris is a threat even if it simply damages and does not destroy probes and spacecraft, as each individual impact leads to the formation of more debris.
This phenomenon, commonly called «Kessler’s Syndrome» (proposed in 1978 by astrophysicist Donald J. Kessler), is conceptually comparable to an uncontrolled nuclear chain reaction, where each impact increases the chances of subsequent collisions.
Although orbital bodies are subject to orbital decay, it is exponentially correlated with the orbit in which they are placed. Bodies in orbits around 100 km, which is the artificial limit from which we begin to define space, also called the Kármán Line, have relatively fast decay times, ranging from a few hours to days.
It is important to underline that the duration of the time between the launch and the re-entry of a celestial body is also influenced in a non-negligible way by its surface and its mass, as these two values respectively influence the impact area with the (few) atmospheric atoms present and the ability of the celestial body to face this resistance.
At orbits of around 550 Km (where we encounter the first main cloud of debris), the decay time is estimated at around five years. The second one is encountered at around 800 Km, with an estimated reentry time of one hundred years.
Such a syndrome should be considered a threat of human extinction, as we would risk being «confined» to a single celestial body, and therefore humanity would be more susceptible to mass extinction events as we would have all the forms of life known to date on a single planet.
The presence of debris clouds could in fact render too risky making space missions (with and without human crews), making it impossible therefore to do “contingency missions” to avoid tragedies, such as asteroid trajectory changes or even actually making it impossible for humanity to become a multi-planetary species.
The big problem is that if this threat is not addressed, considering the increase in missions (and therefore the increase in debris in orbit), we could soon reach a moment of maximum criticality.
In particular, the threat is present mainly in Low Earth Orbit (LEO, below 2000 Km), as it is one with the lower volume (in m3) available and that not only registers the highest amount of orbital objects, yet also registers the highest amount of new yearly satellites mainly caused by the growing presence of commercial constellation (such as Starlink, OneWeb, Project Kuiper and more) that have as a mandatory requirement for their operation the usage of hundreds, if not thousands, of satellites.

Source: Pablo Carlos Budassi.

Source: J.C. Liou, PhD (NASA).

It is important to underline that the risk is not only due to inactive satellites, yet by all the missions being done.
In fact, a non-negligible amount of debris is generated at each launch, due, for example, to micro-fragments of paint, or due to residues generated during the decoupling process, i.e. the separation between two elements of the lifter or orbital payload from the launcher.
Above all, the field of separation technologies needs to become more sustainable, as today a considerable number of missions use pyrotechnic techniques (with explosive bolts) to achieve the desired results, with the obvious consequence of creating fragments.

Source: JJ.C. Liou, PhD (NASA).

Funding and current solutions

The difficulty in dealing with this problem is due to technical factors (being space missions) and economic factors, considering the high cost of space missions.
There are three possible strategies to deal with the problem of space debris:

• Prevention: avoid the creation of debris in space, through the application of technologies and/or procedures designed to limit the risk of fragment production.
• Detection: Keep track of orbital fragments to calculate the orbits with the greatest risk of impact, so you can avoid them. In addition, the monitoring makes it possible to carry out maneuvers to evade debris formations (such as those carried out periodically by the International Space Station).
• Removal: elimination of debris already present in orbit, through the application of particular technologies, limiting the creation of further debris.

In the event that the prevention of the creation of new debris is not possible (i.e. the impossibility of de-orbiting defunct stadiums or satellites), some remedial measures have been developed, such as the movement of artificial bodies at the end of their operational life to specific and designated orbits, called «Graveyard Orbits».
It is important to emphasize that the risk of abusing this possibility would lead to «overloading» these orbits, filling them beyond the acceptable level of defunct satellites.
Sometimes, unfortunately, these measures are not applicable, and this happens mainly on satellites that have already died or on debris that was not tracked before the impacts.
Various debris removal missions have been estimated and planned, as there are several technological possibilities to address this problem.
It is possible to give a dichotomous subdivision of the solutions identified, grouping them into two large families:

• Hard Removal: Removal of debris with the use of «contact» technologies, such as nets, harpoons, joint de-orbiting.
• Soft Removal: Modification of trajectories through the use of «non-contact» technologies, such as lasers (terrestrial or orbital), influence of the «gravitational well», solar light condensation.

Each of the technologies developed has advantages and disadvantages.
In general, contact technologies risk creating additional debris in the event of failure, such as in joint de-orbiting technology, where the satellite intent on locking on to the other can perform a wrong maneuver, causing an impact that would destroy both orbital bodies and debris defined as «residual» (i.e. those generated by an incomplete removal of the threat. For example, capturing a satellite with a network could cause some of its delicate components, such as solar panels or antennas, to fragment.)
Non-contact technologies, on the other hand, generally have the disadvantage of being subject to additional complexity factors (e.g. removal via terrestrial laser has the prerogative of a clear sky in order to operate) and/or lack of versatility in a short time (such as the modification of trajectory due to the influence of the gravity well).
It is interesting to note that debris removal technologies are, in theory, also usable in Planetary Protection against the threat of asteroids, so exclusion from debris removal application should not imply a break from research and development.
On a technological level, many of these solutions require a lot of research and development. It is also important to consider that these technologies, being still at the prototype level, do not have the ability to exploit scale factors to reduce unit costs.
Considering the fact that many of these technologies are developed by start-ups, they have limited capital resources available.
Around the world, there are a multitude of entities that are developing and building solutions to the debris problem; They are financed in a non-negligible way by the public sector (an environment that is already in difficulty due to reduced budgets and bureaucratic slowness). It is also important to underline the fundamental difficulty in having a single strategy, at an international level, for reaching a solution, as each nation aims to favor its own domestic industries to the detriment of collaborations.
Finally, a big problem is the lack of awareness in general among the population, and this causes a lack of popular requests for solutions, as the issue is still niche and relegated almost entirely to the aerospace sector and not adequately discussed in other environments.
For these reasons, an international fund managed by an international body could be the ideal answer for the resolution of this global problem.

Hypotheses of new governance – “International Department for Space Safety”

In the second part of the first chapter, we will analyze the possible creation of a public body with the aim of collecting and managing specific funding for orbital debris removal missions.
It is important to underline that in the legal field there are no well-structured foundations of international law on the specific subject, as many of these issues are very abstract in the field and poorly structured with respect to the real requirements.
This is due to the rapid development of the space economy, and the reactive slowness of the entities operating in the sector.
Although this thesis focuses on the economic factor of creating a debris tax, it is important not to ignore the legislative factor as this guarantees a hypothetical starting and ending point, to be considered as a «possible ideal scenario».
The name chosen for this organization could be «International Department for Space Safety» (IDSS).

Powers

The first fundamental element to be defined in this hypothetical international body is that of powers.
In order to define the powers, it is necessary to define the Vision and Mission of the organization, namely:
Vision: To become the reference body for space safety issues.
Mission: To manage all space safety issues, including that of space debris, from a legislative and above all executive perspective.
It is important to emphasize (as highlighted later in subchapter 1.2.3) that at the legislative level the Department would act only as a consultant and not as an approver of legislation. Legislative power in the pure sense (that of creating and passing laws) would be vested in the United Nations, in the form of binding treaties, agreements, and resolutions.
At the executive level, the main tasks of the Department would be the following:

• Monitoring of the orbital security situation, also keeping track of risk factors, and identification of solution strategies.
• Raising the capital needed to finance operations, both space and non-space.
• Assignment, potentially through tenders or direct investments, of these loans to third parties for the performance of operations.
• Analysis and approval of space launch missions.

Side tasks are also possible, including:

• Monitoring of third-party operations (private or public) to maintain the guarantee of third-party operations (monitoring, as inspectors, to ensure that the decisions taken in the United Nations on the matter are respected).
• Uniformity of protocols and assessments of the characteristics of entities operating in the sector, in a conceptually similar perspective to what is carried out by IATA’s Operational Safety Audit program, in the aviation sector.
• Direct management of debris removal operations as a space operator.
• Recovery and collection of hazardous and non-hazardous materials of interest, such as bio-geological materials (ground samples of other planets for the study of extraterrestrial soils) or materials of cultural interest (e.g. historical artifacts in the space world, such as the remains of the first missions).
• Management of rights to exploit the space environment, in particular mining activities on planets and minor celestial bodies, and on rights relating to extraterrestrial land.
• Creation, management and allocation of orbital slots to ensure sustainable development of terrestrial and extraterrestrial orbits.

At the functional-operational level, this Department would have a myriad of tasks. For the sake of simplicity, only the four main activities carried out by it will be analyzed in detail in the next sub-chapter.
Importantly, the extension of the executive power of the IDSS could be applied in a myriad of ways:
The simplest version would include assignments to analyze the sector, raise funds and allocate them.
In the more complex and more powerful version, however, it would be the de-facto Planetary Protection body of UNOOSA, or the United Nations Office for Outer Space Affairs.

Operations

In this sub-chapter, we will analyze in more detail how the work of the International Department for Space Security would be carried out, in particular on operations related to space debris.
Activity number one: Monitoring of the orbital security situation, also keeping track of risk factors and identification of solution strategies.
Procedure: Collection of information on the «state of health» of the orbits, comparing with bodies with debris monitoring capabilities.
Identification of risk factors, including impact trajectories between man-made or natural elements (such as asteroids), solar flares, orbital tests and other threats. Gathering information from third parties and internal sources about how best to resolve these issues.
Activity number two: Raising the capital necessary to finance operations, both space and non-space.
Procedure: Collection of information relating to the departing orbital missions, calculation of the parameters necessary for the estimation of the amount due and collection of the amount itself. The estimation of the amount, being composed of formulas that are not only mathematical but include risk factors and qualitative ethics, would be carried out by internal panels. The advantage of raising funds in the form of a tax from operating entities and not in the form of investments by space agencies is that of independence in decision-making. Such impartiality ensures that global interests are interposed with those of individual nations, giving the possibility of having a common strategy against a common threat.
Activity number three: Assignment, potentially through tenders or direct investments, of these funds to third parties for the performance of operations.
Procedure: Collection of information on solutions under development by public and private entities, and subsequent solutions of the most promising technologies. The allocation of funds through direct investment would be carried out through selection made by an internal panel of experts (with economic-scientific backgrounds), and potentially these investments could be made not only in correspondence with direct products (paying for the result, i.e. the debris removal mission), but also from an equity /debt financing perspective.
Activity number four: Analysis and approval of space launch missions.
Procedure: Collection of information from the entities involved (launcher and main entity operating the load) of the specifications on the mission, assessment of the risks and technologies used and decision (through an internal panel) of a feedback that can be positive (the mission can be carried out) or negative (the mission cannot be carried out).
At a general level, the functioning of the Department would be as follows:
First of all, a mission request (such as the launch of a telecommunications satellite) would be received and the approval of it would be discussed.
Subsequently, the two amounts due (analyzed below) would be calculated with the subsequent procedure for the collection of that tax.
These accumulated funds would then be invested in aerospace technologies and/or companies with a view to using these creations to solve the debris problem.
In the meantime, in the background, an orbit analysis activity would be carried out, necessary to provide information both for mission approval decisions and for decisions on debris removal missions to be prioritized.

Structure

In this subchapter we will briefly analyze the structure of the International Department for Space Security, both internally and in the context in which it is framed.
The Department could be placed under the control of the United Nations Office for Outer Space Affairs (UNOOSA). The Office was created in 1958, with the aim of supporting the United Nations Commission on the Pacific Uses of Outer Space (COPUOS) with the processing of data (such as the register of artificial orbiting bodies) and the creation of the legislative foundations necessary for the creation of treaties.
The Department, being placed under the control of UNOOSA, would be facilitated in its operations by being able to take advantage of the technical support and experience (both in technical and legal matters) necessary for the proper functioning of a public body in a complex sector such as space.
At the same time, the Department would provide support to the Legal Affairs Section and the Space Affairs Section in the creation of Orbital Sustainability legislation.
Internally, the Department would be composed, in addition to the administrative bodies, of the following sections:

• Orbital Safety Section (OSS): Responsible for monitoring orbits and approving launch requests.
• Economic Affairs Section (EAS): Responsible for taxing launches and distributing investments to finance debris removal operations.
   

Financing

Let us now analyze the possible sources of funding of the International Department of Space Security.
In contrast to UNOOSA and COPUOS, the Department could function independently of UN budgets, especially in the medium and long term.
The Office and the Commission are financed by the United Nations budget, with the risk of instability (albeit very remote) given by the possible difficulties of a country, whether economic or governmental. It is also possible that some nations may decide to suspend their support because of space-related decisions.
Financing the Department through the application of Pigouvian taxes on missions would guarantee a factor of independence from international political dynamics, thus guaranteeing its autonomy, in particular with regard to the collection of amounts and financing to third parties. Considering the fact that almost all the missions are announced with a significant temporary advance, this would also allow easier planning of the operational and management budgets of the Department.
This is particularly true of high-profile missions, which would constitute, as will be analyzed in the following chapters, a large portion of the organization’s revenues.
This document provides for the collection of the funds necessary for the operation of a single organization (the International Department of Space Security), collected both to ensure its bureaucratic functioning and to be able to finance missions to remove space debris and related missions, such as the monitoring of such debris.
It is also possible, however, that a Global Space Agency will be established in the not too distant future, particularly when the issues of international and interplanetary collaboration become too complex to be managed through multilateral agreements.
In that case, the Department could be used as part of the bodies collecting amounts necessary for the functioning of that Agency.
For the correct financing of the Department, it is therefore necessary to create a tax that allows both the proper functioning of the institution itself, and the presence of considerable funding to be distributed to the proponents of solutions to the problem of debris.

CHAPTER II

Pigouvian tributes for space debris

Now we will deal in more detail with the identified tribute, starting from the general characteristics and then developing the formulas that compose it.
Certain modifiers will also be identified that can be applied to ensure the management of risks and ethical factors.
It will also analyze how this tax could be applied and what impact it would have on the Space Economy of today and the future.
Finally, some alternative solutions to the one discussed in this thesis will be briefly introduced.

General characteristics and method

Analyzing what would be the general characteristics that allow us to structure the tax, the basic idea is to structure a formula that allows us to apply the «polluter-payer» principle, considering that the problem of orbital debris is a negative externality. In fact, the pollution generated by space missions (in terms of fragments generated and potentially generated) has a social cost that falls not only on those operating in the sector, but on the entire world population, which has no decision-making power in the matter and is therefore a «victim» of other people’s decisions.
Since orbital pollution is an externality, it is therefore difficult to assimilate to space activities in a direct way, and therefore it is difficult to deal with under the effect of traditional market forces.
In particular, these are negative production and network externalities.
In fact, actual and potential damage increases with production (understood as an increase in the number of missions) and with the increase in the use of orbits, which we can identify as a natural infrastructure with limited (space) capacity.
Having briefly defined the fundamentals with which we define the phenomenon of space debris as an externality, it is necessary to move on to the identification of the solution.
First of all, it is necessary to define what the risk elements are, i.e. what is likely to produce debris. We have seen before that debris can be generated by internal factors, such as the breakage of components, or external, such as collisions with other satellites, artificial or natural. However, since the debris originates from artificial objects, they all theoretically have a property factor, to which we can associate the cost of the externality.
In particular, we identify that the right to property falls directly on two types of entities, namely:

• Launchers: That is, the entities (public or private) that carry payloads from the surface to orbit.
• Launched Subjects: That is, the entities (public or private) that manage the mission load.

It is important to note that the combinations between these subjects are not always in a 1:1 ratio. In fact, it is possible that in a launch several payloads are carried, which can be part of several missions, or there can also be launches that do not involve loads (e.g. launch tests).
In addition, it is important to define «mission» as «an artificial activity that involves sending objects (natural or artificial) at altitudes greater than one hundred kilometers.»
In doing so, sub-orbital launches are not excluded, i.e. those missile launches that provide for a re-entry in a time less than one orbit from the definition, as they can potentially exceed the Kàrmàn line and create risks to other satellites (a striking example provided by military «anti-satellite» missions).
Market economy solutions to externalities are as follows:

• Pigouvian Taxes or Subsidies, with the aim of rebalancing economic situations.
• Adjustments, to limit activities that cause negative externalities.
• Government measures, for the provision of services with positive externalities.
• Processes, to compensate for parts damaged by negative externalities.

It is important to note that the answer to the problem proposed in this thesis includes all these solutions, although only that of the Pigouvian Tributes will be analyzed in detail.
In a perfect market, such a tax would not be necessary as one could apply Coase’s Theorem (which highlights the fact that the solution can be found between private parties without government intervention). It requires that property rights are well defined, that there is complete information, that individuals act rationally, and that transaction costs are minimal.
In the case of space debris, however, the last two points are not verified and therefore it is not possible to achieve a Pareto-efficient situation.
For the calculation of the Pigouvian Tax, it would be necessary to know the external marginal cost (valued at the optimal point) that induces the producing entity to achieve Pareto efficient production.
This, however, is, to date, incalculable considering the myriad of variables at play, and therefore in this thesis only a hypothesis of a possible method of calculating this tax is made.
By setting this tax as a pollution penalty, the aim is also to encourage entities operating in the sector to make their choices more sustainable, reducing emission risks (i.e. the risks of debris production) by applying strategic choices that also take into account the long term.

Primary formulas

Let’s analyze the two primary formulas of Pigouvian taxes identified.
As discussed above, the presence of two particular types of operating entities requires the creation of two separate formulas, which are tailored to the specific needs of each party. We then define two taxes: «Launcher Tax» (LT, applied to Launching Subjects) and «Payload Tax» (PT, applied to Launched Subjects).
Launcher Tax (LT):

CL is the Cost of Launcher of the carrier rocket. This value serves as the basis for calculating the tax. The higher the cost, the higher the revenue for the IDSS.
NS is the Number of Stages, i.e. the segments of the launcher. Each stage corresponds to a number of separations, with the potential to create debris. The greater the number of stages, the higher the value of the amount.
VLC is the Value of Launching Company. The higher the value, the greater the capacity to «absorb» the cost of the tax, and the higher the amount of it.
R is the probability that the mission will succeed based on its reliability and that the launcher will not be lost. The higher the reliability, the lower the amount of the toll will be.
LM is the set of Launcher Modifiers, which are discussed below.
Payload Tax (PT):

CP is the Cost of Payload. This value serves as the basis for calculating the tax. The higher the cost, the higher the revenue for the IDSS.
ORI is the Orbital Risk Index, i.e. the indicator of the risk associated with the specific orbit of transit and positioning of the cargo. As the indicator increases, the value of the tribute will increase.
DCI is the Decay Index, i.e. the indicator of the risk associated with the decay time of the load. As the indicator increases, the value of the tribute will increase.
MRI is the Mission Risk Index, i.e. the indicator of the risk closely related to the technologies and methodologies applied in the mission. As the indicator increases, the value of the tribute will increase.
VPC is the Value of Payload Company, i.e. the company primarily involved with the load. The higher the value, the greater the capacity to «absorb» the cost of the tax, and the higher the amount of it.
PM is the set of Payload Modifiers, which are analyzed below.
It is important to note that the calculation of the LT involves a division based on one hundred of the Launch Cost, as the value is then further reduced by the calculation of reliability.
It is also essential to underline that the presence of the logarithm is given by its factor of reducing the «weight» of the amount due to the increase in the value of the company under analysis. This allows you to obtain larger amounts from companies that, technically, have the ability to support these missions in a greater way, without penalizing them excessively.

Risk-Ethics modifiers

In this subchapter we will analyze all the Modifiers provided within the two formulas.
The need for Modifiers stems from the premise of aligning the toll with the importance and risks of space missions.
Below is a list of possible Launcher Modifiers with potential values:

It is important to note that these modifiers aim to promote sustainable access to Earth orbit through penalties and incentives, respectively by raising or lowering the value of the tax.
The approach of these modifiers is mainly «punitive», raising the value to be paid in a significant way, so as to avoid reckless behavior and the use of technologies harmful to the health of our orbits.
Below is a list of possible Payload Modifiers with potential values:
As far as loads are concerned, the number of modifiers is reduced as most of the parameters are included in the three Indexes, which will be analyzed in the following chapters.
It is important to emphasize that the list of modifiers is not exhaustive, and that in case of actual application the number of them or the assigned values can be modified, to better align the formula of the tax with the actual requirements and changes in priority over time.

Application of the tax

In this sub-chapter, we will analyze the application of the tax, i.e. how the mechanism and procedures would work if applied.
This is a sensitive topic, as an incorrectly structured enforcement system could penalize the entire basic idea behind the creation not only of the tax, but also of the entire Department.
The information regarding the launcher and the payload would be provided by the respective owners (i.e. Launcher and Launched Subject), and would be checked and evaluated by a committee within the Department, made up of members of both Sections.
This is because the request for approval of the mission would be structured in such a way as to provide for the creation of a tax figure following a successful analysis.
In the first phase, the Orbital Safety Section (OSS) would be responsible for approving the launch request.
In the event of a positive outcome, the Economic Affairs Section (EAS) would come into action with the task of determining the amount of the tax and the details of the economic solution envisaged (i.e. the terms of payment).
This process would take place in two separate stages also to provide both requesting entities with timely feedback regarding the approval or denial of the launch permit, which is especially important for missions with short timelines.
It is also possible to provide a zeroing of the amount, a cancellation of analysis or even a post-launch analysis procedure, in special cases of urgent missions, such as missions for the rescue of astronauts.
The committees, ideally, would be composed of five figures with the following specializations:

• Scientists: To assess the scientific qualities of missions.
• Engineers: To assess the technical/engineering qualities of missions.
• Economists: To assess the economic qualities of missions.
• Jurist: To assess the legal qualities of missions.

Ideally, the committees should not be fixed, but would be made up of a random selection from within the Department’s pool of experts, so as to avoid conflicts of interest.
This would be feasible in particular with subjects with an Economic and Law background, while subjects with Scientific and Engineering specializations should be chosen on the basis of specific knowledge on the topics analyzed and the technologies used by the individual missions.
It could be assumed that the set of experts is approximately thirty subjects, so as to allow a continuous variation of the members of the specific commissions, carried out periodically or by composing the panels for each specific mission.
To ensure the proper functioning of the Department and avoid unnecessary analyses, Applicants should provide all the necessary information in full, remaining penalized with penalties in case of providing incomplete or incorrect information.
In full of the request, it would be advisable to pay an amount (fixed or variable) to balance the time cost of data analysis.
These amounts should be divided both according to the total size of the information package provided and according to the category of missions.
An additional service could be provided as a consultancy, aimed at Applicants, to allow them to fully understand the mechanism for providing the data necessary for the analysis.
In order not to damage market mechanisms, this advisory service could also be provided by parties outside the Department.
The general authorization would take place following the approval of all the included components. For example, a launch involving the deployment of four satellites from four different missions would be approved when all five applications (one launch, four payload) would be approved.
It is advisable to include a mechanism for the subjects analysed to challenge them if they determine that the conclusions on their claims are incorrect.
This is the case both in the case of the denial of permission to carry out the mission and in the case of the incorrect calculation of the value of the tax.
Of particular interest would be the protection of sensitive data in relation to missions, since they are often also of a defensive nature of the requesting nations, and therefore subject to state secrets. It would be advisable to provide a mechanism for the protection of such information, but this specific need is not the subject of this thesis.

Impact on Mission Costs

Let’s briefly analyze the possible impact on the costs of space missions.
In this context, it is necessary to underline the dualism generated by the application of taxes.
In fact, it is necessary to balance the interests of the Department (i.e. maximizing revenues in order to finance as many missions as possible) with the interests of the payers (i.e. minimizing the expenses caused by the application of the tax).
It is undeniable that the implementation of a tribute, however limited, has the effect of raising the prices of missions.
The objective should be not to exceed a certain threshold (in the case of missions aligned with the identified risk and ethics objectives) so as not to make the «weight» of the amount too high.
Tentatively, one could aim for the following percentages of direct increase in mission costs, divided by launcher category:

• Small Launchers (<2000Kg): 2%
• Medium Launchers (2001-20000Kg): 5%
• Heavy Launchers (20001-50000Kg): 8%
• Super-Heavy Launchers (>50001Kg): 12%

On the other hand, with regard to satellites, the following increases could be targeted, divided by satellite category:

• Nano Satellites (<10Kg): 2%
• Micro satellites (11-200 kg): 3%
• Small Satellites (201-1200Kg): 5%
• Medium Satellites (1201-2500Kg): 6%
• Intermediate Satellites (2501-4200Kg): 8%
• Large Satellites (4201-5000Kg): 10%
• Heavy Satellites (5001-7000Kg): 12%
• Super-Heavy Satellites (>7000Kg): 15%

These percentages have been identified by the author as possible target values and are not actually derived from the calculation of the formulas, due to the limited availability of information necessary for real-world application.
Since it is not possible to identify the actual percentage value of the tax due to the lack of analyzable data, within this thesis it is only possible to estimate in a summary way the effect generated by the implementation of it.
It is important to emphasize that different categorizations are possible, although these have been made to make it easier for the reader to understand.
The general idea of aiming for smaller increments for smaller missions (e.g. nanosatellites launched from small launchers) has the disadvantage of favoring the development of a market, within the Space Economy, tending towards «small and numerous», as more satellites would be needed to carry out the same number of objectives as a larger one.
At the same time, however, not only is this already the general trend of the sector, especially following the advent of the so-called Cubesats, i.e. small satellites weighing between 1 and 32 kilograms, but it would favor the development of the global economy in the sector, avoiding monopolies and, on the contrary, favoring the birth of startups and therefore also continuing innovation and increasing the general efficiency of the sector.
This tendency to eliminate monopolies would counterbalance the increase in costs (due to the application of the tax), increasing competition and reducing the costs of launching launchers and producing satellites.
It is important to make an exception with regard to the so-called «Key Missions», which will have a facilitated regime (thanks to the indices that will be analyzed later), and among which we find:

• Manned missions.
• Crew rescue missions.
• Planetary Security Missions.
• Strategic exploration missions (such as probes to other planets).

This is, of course, a non-exclusive list, and the final decision of which mission to mark as «Key» would be up to the Department’s analysis committees.

Alternative Tributes

With regard to the other tax structures identified in the process of creating the formulas indicated above, initially it was thought to apply a Flat Tax to each mission, a solution determined to be inefficient as two missions can have different characteristics (including objectives, technologies), and a single value would not correctly reflect the objectives of the Department.
Subsequently, the possibility of a system involving the use of modifiers to align global efforts with a single policy, that of sustainability, was analyzed.
Finally, the importance of dividing the tribute into two parts, one for the Launcher and one for the Launched Subject, was identified, thus creating a «double base» formula. This makes it possible to analyze even missions that are not in a 1:1 ratio (between launcher and launched elements).
These results were then analyzed from an Advantage/Disadvantage perspective, with the results indicated in the following table.
It is important to underline that the solution identified should be re-evaluated periodically, in order to align with global sustainability goals.

 
CHAPTER III

Application of Pigouvian Tribute to the Present-Day World

We now come to the actual application of this tax.
In particular, we will focus on the difficulties that will be encountered in the actual design of the indices.
In fact, of the two formulas, the one that is more easily applicable is the one relating to launcher launchers, for several reasons, including being present in fewer numbers (both as families of launchers and as configurations) and having a very specific purpose (to carry orbital or sub-orbital trajectories of payloads) unlike satellites that potentially have a greater variability of possible missions. On the contrary, satellites are much more complex to analyze, and therefore it is correct to dwell on indices in an additional way.

Orbital Launchers Database

It is now necessary to analyze the creation of a database of present and future Orbital Launchers.
It is important to underline that among the elements necessary for the creation of the tribute, the Orbital Launchers Database tends to be the easiest to create.
This is due to the small number of lifters present and under development, which reduces the size of the database to be created.
The creation of a unified database could be useful to speed up the process of calculating the amount applied to launchers, as for each lifter configuration there are two variables: the reliability and the value of the launcher company.
These values should be easily verifiable when the launch request is analyzed, and therefore it would be advisable to create a collection of the information already present on the launchers, as it would facilitate the acceptance and application of the tax.

Payload Database and Modifier Indicators

In this subchapter we are going to study the creation of a Database of present and future Payloads, also studying in detail the Modifier Indicators.
Contrary to what has been identified by analyzing the Carriers, the creation of this database would be much more complex, given the high number of possible combinations of «hulls» (satellite buses, in technical jargon, i.e. the «platform» on which the rest of the load is built) and internal instrumentation. This prevents the creation of a list of possible satellites in the short term, and therefore the analysis of the toll on satellites is penalized by this.
Considering the taxation’s emphasis on adaptability to risk and ethical factors, it is important to emphasize that cargoes, unlike carriers, do not have a single possible mission. In fact, lifters can be synthesized as tools to bring loads from point A to point B, and for the tax their efficiency is analyzed.
On the contrary, for loads, it is necessary to consider the various internal components, increasing the complexity.
To overcome this difficulty as much as possible, the tax formula applied to loads has three «families» of modifiers, i.e. the Indicators, which act as a «base» on which the various load technologies and strategies are analyzed.

The content of the indicators is very broad, and may include, for example:

• ORI (Orbital Risk Index): The main factor under analysis is the density of debris in the transit orbits and in the final orbit. As an indicator of impact risk, it is also important to consider the time factor within the equation. To create this indicator, it would first be necessary to structure the orbits (terrestrial and non-terrestrial) into layers and rings, each with a precise risk value that would be multiplied by the units of time in which the payload is inside the orbit (whether it is passing through or destined to remain in that specific orbit). An improved version would also potentially consider the actual trajectory of the payload, the presence or absence of maneuvers in a given orbit, and even the relative position of the debris in orbit. To date, the amount of data needed for the creation of this database is too large, as it would potentially require the use of supercomputers with computational capabilities (in particular for the calculation of trajectories with respect to those of debris) not yet available. If we wanted to simplify the understanding of this indicator, it would be very similar to an air traffic control program (in this case orbital traffic) with the ability to predict the risk of impact given by a specific trajectory.
• DCI (Decay Index): This indicator would be very similar to the ORI, with the variant being purely related to the load under analysis rather than to external factors. In particular, this indicator would be influenced by the mass of the payload and its surface area, as a greater mass and a smaller surface area increase the time it takes for the satellite to de-orbit naturally. Alternatively, in particular for satellites equipped with atmospheric re-entry technologies at the end of the mission, the identified value could be replaced by the expected time that will be spent in orbit. It is important in this case, however, not to exclude the data of the satellite surface, as it affects the possibility of impact, and it is added to the MRI.
• MRI (Mission Risk Index). Unlike the other two, this indicator would be directly related to the purpose and content of the load. The factors taken into account are, for example: the presence of explosive detachment technologies (as in launchers), the controllability of the payload (as in launchers), the presence of atmospheric re-entry options (included in the mission plan, both re-entry for recovery and re-entry for demolition) or displacement in graveyard orbits, the inclusion of the payload within constellations, the presence of military targets in the mission, the presence of propulsion technologies, the presence of crews on board, scientific potential, the presence of technologies or targets for the generation of debris, and other factors. This non-exhaustive list is also related to other physical and technical elements, such as the dimensions (in terms of surface, volume and width) of the load itself.

Of the three indicators, MRI tends to be the easiest to calculate, although this is not the objective of this thesis.

Three-year IDSS budget hypothesis (2020-2022)

In this subchapter we will analyze a possible budget value available for the Department, analyzing the missions in the three-year period from 2020 to 2022.
It is important to point out that this budget is not possible to calculate precisely with the data available to date, and therefore only an estimate will be made.
An important issue to analyze is budget allocation.
It would tend to be correct to allocate the revenues from the taxation on launchers to finance debris removal launches, while the revenue from the tax on payloads to finance the production and operation of anti-debris satellites.
In terms of revenue from launchers, we estimate a type of carrier for each individual class, namely:

• Small launchers (<2,000kg): Electron (Rocket Lab). Cost: 7.5 million. Revenue 0.15 ml.
• Medium launchers (2,001-20,000Kg): Falcon 9B5 (SpaceX). Cost: 67 million. Revenue 3.35 million.
• Heavy launchers (20,001-50,000Kg): Ariane V (Arianespace). Cost 150 million. Income 12 million.
• Super-Heavy Launchers (>50,001Kg): Falcon Heavy (SpaceX). Cost 150 million. Income 18 million.

We know the total number of launches carried out in the three-year period, summarized in the following table:
Rounding the figure to 1,200 million, excluding administrative expenses, 15 Falcon 9B5 launches (priced at 75 million/each, including extra expenses, for a total of 1,125 million) and 8 Electron launches (priced at 9 million/each, for a total of 72 million) could be financed with the proceeds of the three-year period. In the real case, it is very likely that the assignment of missions will be made by distributing them to several launcher suppliers, in order to avoid favoritism as well as damaging certain launcher programs.
It is important to note that given the high number of launches that can be carried out with the Department’s budget, not only could many missions be tackled at the same time, but a myriad of Launchers could be supported, providing necessary support to a strategic sub-sector.
The budget related to the loads is, with the information present, almost impossible to estimate, and for this reason it is not considered as the objective of this thesis.
However, we can alternatively make a rough estimate of how many missions could be launched, in particular:

• Each Falcon 9B5 launch could contain 10 satellites (2 tons each) for debris removal.
• Each Electron launch could contain 2 satellites (100 Kg/each) to test debris removal technologies.

The hypothetical budget of the three-year period, therefore, could allow to support 150 removal satellites and 16 technology prototyping satellites.
Although the amount of debris is extremely high, such numbers would allow us to deal with the situation in a very realistic way and would be a huge step forward compared to the current situation.
It is advisable, therefore, while the requirements of the tax on payloads are being defined more accurately, to apply the taxation on launchers in the short term.
Considering the legal and logistical complexities in the large-scale application of this solution to the debris problem, it is important to identify priorities on which to focus initial efforts. In particular, low Earth orbit (LEO) and sun-synchronous orbits (SSO) can be defined as «urgent», as they are subject to a high annual increase in satellites positioned in them.
Therefore, it is desirable that the international community implements this tribute as soon as possible to finance the removals in the two types of orbits mentioned above, in particular in LEO as it is where we find the most critical situation and it is also the strip of space in which the International Space Station is present.
In the absence of the Department, such implementation could also be carried out at the national level, replacing the international body with the various national agencies of the countries where the companies active in the sector are registered.

Source: Pablo Carlos Budassi.

Conclusion

The analysis carried out shows that a Pigouvian tribute can be a suitable solution to the problem of space debris, particularly if used directly to finance its removal. The use of a dual-base formula makes it possible to separate the requirements of the subjects under analysis (Launchers and Launchers) and the use of modifiers allows the Space Sector to be aligned with sustainability objectives.
The creation of an international body under the control of the United Nations makes it possible to implement a global strategy for solving a problem on an interplanetary scale.
Taking into account the difficulty in obtaining the information necessary to validate the tax formulas, it is still possible to consider this preliminary analysis of the solution as satisfactory. Since debris is an important and urgent problem, the author will continue the study of this and other solutions. For any additional information regarding the methods, the data used and identified, the databases, the estimates and the sources for further information, it is advisable to contact the author directly.
Although the tax to finance this hypothetical Department is not the solution to all problems in the Space Sector, it is recommended that it be considered by policy-makers in the sector as an applicable solution in the short to medium term, even if only in part and only in a national way.
The key element, even if this solution is not specifically applied, is to develop and implement a set of solutions to increase humanity’s resilience against a potential Kessler Syndrome, and to date a large part of the problem lies in the economic factor of the absence of incentives for the removal of debris. For this reason, the author advises the various parties involved in the matter to find a solution to solve the space debris problem, before it is too late.

Siteography

• European Space Agency (ESA)
• National Aeronautics and Space Administration (NASA)
• United Nations Office for Outer Space Affairs (UNOOSA)
• Space Debris User Portal (SDUP)
• Pablo Carlos Budassi
• “Economics of Welfare” di A.C. Pigou, 1920
• “The problem of social cost” di R. Coase, 1960

The author remains available to provide further information, in particular regarding the progress in the validation of the formula.