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1.3 Market failure

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Question 8

Extract B

The Tragedy of Low Earth Orbit (LEO)

Low Earth Orbit is a critical common access resource (CAR). In recent years, commercial satellite operators have begun deploying massive "mega-constellations" consisting of thousands of small satellites to provide global high-speed internet. Because international space law does not clearly define private property rights over specific orbital altitudes, these private firms act in their own short-term interest. They launch satellites rapidly to secure first-mover advantages and establish global network dominance.

Currently, commercial satellite operators are not held financially responsible for the long-term accumulation of orbital debris. They continue to launch massive satellite constellations as rapidly as possible to dominate global internet markets. Addressing this space sustainability crisis requires coordinated global regulation, orbital traffic management, or binding international treaties on debris mitigation.


According to Extract B, "commercial satellite operators are not held financially responsible for the long-term accumulation of orbital debris. They continue to launch massive satellite constellations as rapidly as possible to dominate global internet markets."

Assess whether it is rational for satellite operators to behave in this way.

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1.3 Market failure Questions

  1. A Level
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  3. /1.3 Market failure