The Economic History of the Solar System: The Regulation of Low Earth Orbit

The early periods of space exploration were characterized by a lack of cohesion. There were some joint ventures and agreements not to weaponize low earth orbit but in most cases, each nation followed it’s own path as far as space exploration went.

A growing problem caused by congestion in orbit changed this. At the close of the twentieth century there were over two thousand satellites in orbit. Within twenty years the number had doubled. Once debris and discarded boosters were taken into account, there were over half a million objects larger than a centimeter orbiting the Earth. None of these orbits were stable but, for many of the objects, the decay could take decades if not centuries. For the people of the day, space was congested and it was only going to get more so.

In 2009, the first accidental collision between satellites occurred when Iridium 33 and Kosmos 2251 collided. The space exploration community lived in fear of the Kessler Effect, the situation where debris from one collision hits another satellite generating a cascade effect until the amount of debris renders low Earth orbit unusable. In 2020, a small cascade that eliminated seven satellites over several weeks made the world take notice of this growing problem. The main space faring nations agreed that something needed to be done and the next two years were spent as the various nations jockeyed for position on who should pay. The newer space faring nations argued that costs should be apportioned according to the number of satellites in orbit. For Russia and the U.S., this represented a massive financial burden for satellites that were effectively dead. These countries used their veto to block those proposals and countered that each new launch should contribute to the clean up fund on the grounds that these were the satellites requiring a clear orbital path. In short, Russia and the U.S. argued that, if you needed a space, you should pay for it.

In 2022, a second cascade occurred taking out another five satellites. Orbital mechanics wasn’t going to wait for Earth bound politicians to come to an agreement. In a hurried session a compromise was worked out that Russia and the U.S. would contribute seed funding but a levy was to be imposed on all launches above the Kármán line with the clean up effort being launched from Russian or U.S. facilities. Once agreed, the new rules were strictly enforced as it was to the advantage of the major powers to limit those smaller countries looking to develop ballistic missile capability.

This provided the funds for the clean up and an available source of funds created the incentives required for commercial operators to develop the technology to deal with the mess in orbit. For all the visions of landing on Mars or mining asteroids, the first commercial ventures in space itself was to be the messy business of dealing with the garbage circling the Earth.

This wasn’t to be the end of regulation but it provided the foundation that was used from that point onward.

This post is part of The Economic History of the Solar System. The background for this series can be found here.

The Economic History of the Solar System: First Commercial Ventures Era

The period in which governments monopolize space exploration quickly came to an end. By the early twenty first century, a number of private companies were focusing on ventures in space. Although some of these were spectacular (and fanciful) such as Elon Musk’s desire to set up a colony on Mars, most had viable commercial ends in mind.

There were two main areas of commercial interest, the space tourism industry and the booster industry. Of the two, space tourism was the sexier and more visible. Space tourism focused on providing the well off with a space experience. The first target for commercial space tourism innovators was the simple launch of a small compliment of tourists past the Kármán line allowing a view of the curvature of the Earth and a short period of weightlessness (along with the bragging rights of having been in space). These developments created the basic technology for launching groups of people into space but ultimately the stand alone space tourism industry was a dead end never fully progressing past the stage of taking paying passengers past low Earth orbit.

The problem that beset the industry was the increasing difficulty of getting tourists to each new stage. Getting past the Kármán line was one thing, getting the same sized group into orbit was something else. With each new target, the costs increase exponentially along with the risk – the higher the orbit the more complex and challenging the re-entry becomes. In spite of the vision of early science fiction authors, it was never feasible to get a paying group to the moon and return them to Earth – not as a stand alone venture. The benefit that the space tourism industry did provide was efficient and reusable means to get a group of humans into low Earth orbit. It was only later, once the development of permanent platforms supported by resources mined from space that the true value of this could be exploited.

The other major area of development was on launch vehicles. Government involvement was always historical, with the first exploration era based entirely on government owned launch vehicles. This made sense as the first launch vehicles were simply re-purposed ballistic missiles. The commonality of purpose between the needs of the ballistic missiles and boosters was short lived. With the miniaturization of nuclear warheads, ballistic missiles only needed to carry a modest payload for a relatively short distance but be ready for deployment within minutes. Boosters to put equipment into space demanded ever increasing throw weight and range and launch windows were usually well defined. Without the defence dollars driving innovation, it opened the field for the commercial launch industry who caught up with and then surpassed the government. The advantage the commercial launch industry had was focus on innovation in two specific areas. The first of these was cost to orbit and with its focus on payback, the private industry soon found and leveraged those efficiencies to bring down the cost to orbit. Innovations included reusable launch vehicles, reusable booster stages, and more efficient engines including hybrid engines that could convert from jet (requiring air) to rocket (using own oxidizing agent) operation. The second area of focus was on reliability. This was important to attract better paying customers and to reduce insurance overheads.

With private industry providing efficient and reliable transport to orbit, the government owned booster industry came to a close. Even the largest launch vehicles were commercial ventures. The remaining government involvement was that government subsidized and supported their own national carrier to ensure that their own military and intelligence agencies did not become reliant on launch vehicles from other countries. Each major space exploring nation (the U.S., Russian and China) had a healthy, though subsidized national provider of launch services. The launch industry always remained divided with stiff competition for the dollars of non-military customers who needed equipment launched into space.

This separation of ownership of the launch vehicle and payload was a crucial step in the race to explore space. It took the complex and risky task of getting items into space away from the government sector enabling them to focus on the actual exploration of space itself.

This post is part of The Economic History of the Solar System. The background for this series can be found here.

The Economic History of the Solar System: The First Explorer Era

This was the stage that as which humanity made the first and most tentative steps into space. In this period, the most valuable thing to be gained from the exploration of space was knowledge and the side effects of the innovation required to get there. Almost nothing physical was collected from space itself apart from a volume of moon rocks. The only real benefit was the acquisition of knowledge. Governments drove this first period for two reasons. Firstly, there was no economic incentive and the exploration was expensive ans only governments had access to the resources required. The second reason was that the first stages of space exploration was an offshoot of the industry to develop more and more powerful ballistic missiles – a purely government agenda.  This era was characterized by low orbit manned missions, unmanned probes, high levels of national pride and a lot of mistakes.  The first targets were based in national pride. First man in space. First person to orbit the earth. First man on the moon. First space station. First man (or woman) on an asteroid then on Mars. Planet flybys were also popular targets though these had a beneficial side effect. The more people learned about other bodies in the solar system, the more questions that were raised with follow on missions generally aimed to answer these questions. This created a succession of unmanned probes to Mars and Jupiter in particular that revealed a lot about the conditions on these two planets.

Although the economic incentive wasn’t yet there, this period is crucial to subsequent eras. The knowledge gained during this period defined the targets for subsequent eras. For example the early period focused heavily of finding volatiles such as water on other bodies such as the surface of the moon.

The main reason this period lasted as long as it did is because of the massive costs of getting things into orbit. It cost of around $5,000 to $10,000 per kilogram to get an item into Earth orbit – more to get the item to another part of the solar system. The reasons for this high cost are getting the item out of Earth’s atmosphere and accelerated to Earth’s orbital velocity of 8km per second. This high cost to Earth orbit will be a significant driving force that shaped the economics of the Solar System ever since. Humanity could never fully overcome this problem despite such fanciful ideas such as space elevators, space tethers and anti-gravity drives.

Escaping Earth has always meant a brute force heft into orbit around our planet.

The next post will look at the first economic incentives, the First Commercial Ventures Era.

This post is part of The Economic History of the Solar System. The background for this series can be found here.

The Economic History of the Solar System 

It’s my intention to write some science fiction.  Near future, hard science fiction based on tech that we can believe in today. To do this, I create some serious constraints for myself.  No faster then light travel. No artificial gravity. No aliens or, even, alien artifacts. No laser blasters and no spaceships zooming around like WW2 era airplanes.

But, to make these novels workable, I need conflict and stakes.

So I will look to that most ancient and human source of conflict and stakes – economics.  This means I need an economic history for my setting. NASA and its probes will unveil the Solar system as it is and create the physical setting. I need an economic history to complete the human setting.

These posts are my attempt to create a believable economic history to the settlement of our Solar System.

Update: I have decided that the posts will be written in past tense. It just makes it easier. I’m speculating but just down a single line of thought and it’s a lot easier to write in past tense.

The (growing) outline is as follows:

The Early Period:


For those interested, here’s some of the links that I have used as inspiration for this fictitious history.

Economic History of the Solar System: Links

Colonizing the Solar System: The Basics – Water in Orbit

This is the first of my thought experiments about colonizing the Solar System.  I’m of the view that we won’t wait until we have space elevators or anti-gravity drives. When selecting start colonizing, getting into orbit will be a lottery of effort. Personally, I believe that when humanity gets serious about the Solar System, well still be struggling to get into orbit. I suspect that an early goal for long term settlement will be a consistent and ready supply of water in orbit.

If there’s water on the moon or on an asteroid close to Earth. That will be the primary objective. To establish a settlement and a mechanism for reliably and routinely getting the water for there into Earth orbit. It could be stored above geostationary orbit (where there is less junk) and decelerated into a lower orbit as needed.

The first permanently inhabited colony in space may be on a chunk of ice. Once the cost of moving heavy propellant into orbit is removed then travel time around the Solar System can be reduced and the amount of useful equipment brought into space increased.

In my timeline, this is what has happened. The first colonies were set up to guarantee a ready supply of fuel.