To What Extent Will Space Debris Impact the Economy?

Abstract

With the expansion of the space industry, debris congestion has become a serious problem. When space debris collides with satellites in orbit, it may damage the satellites or, in the worst case, cause an explosion. While economic activity influences debris congestion, debris can also influence the economy. To what extent does debris affect the economy? Furthermore, what would be the optimal path of debris emission considering the economy and space environment? This study aims to quantify the severity of the problem. We simulate the damage caused by the environmental problem of orbital debris using a standard economic growth model in macroeconomics, augmented with a satellite sector and collision possibility. In the model, launching satellites means two things: more factors of production and more orbital objects. A newly launched satellite provides satellite services to the economy and increases production capacity. At the same time, by being placed in orbit, a satellite increases the risk of collisions. Our results show that debris will cause negative damage of approximately 1.95% of global Gross Domestic Product (GDP) in the long term if no debris is remediated at all.