Low Earth Orbit (LEO) is an invaluable natural resource, vital for global telecommunications, weather monitoring, and scientific research. However, LEO is increasingly suffering from the 'tragedy of the commons'. Because outer space is not subject to national sovereignty or private ownership, orbital paths represent a classic common access resource (CAR). It is incredibly difficult and diplomatically complex to exclude private aerospace firms or sovereign nations from launching satellites into these shared orbits.
In the rapidly growing commercial space industry, individual satellite operators have a strong financial incentive to launch large constellations to capture market share and maximize short-term subscription revenues. However, because no single firm owns the orbital space, none have a direct incentive to clean up space debris or avoid risky, close-proximity trajectories that endanger others. This individual self-interest leads to collective over-exploitation of LEO, resulting in orbital crowding, increased risk of catastrophic collisions (the Kessler syndrome), and defunct satellite debris rendering certain altitude bands unusable. This unsustainable depletion of safe orbital space represents a significant market failure, creating negative externalities that threaten future space exploration and global communications infrastructure. Many space economists argue that establishing clear, tradeable private property rights over specific orbital slots could be a critical step toward preventing this orbital degradation.
With reference to the information provided in Extract B and your own knowledge, explain two characteristics of private ownership in a free market economy.
