Low Earth Orbit (LEO) has become an essential arena for global communications and Earth observation, but it is increasingly suffering from a classic 'tragedy of the commons'. Because outer space is not subject to national or private sovereignty, orbital paths represent global common-access resources. It is currently highly difficult and costly to exclude private aerospace firms and national agencies from launching satellites into these desirable bands.
As a result, individual satellite operators have strong financial incentives to launch massive mega-constellations to capture market share and maximize short-term commercial returns. However, because no single firm owns the orbital space, none have a direct financial incentive to bear the high costs of active debris removal or end-of-life de-orbiting. This unrestrained self-interest leads to orbital crowding and an escalating risk of collisions (the Kessler syndrome). The resulting space debris threatens the viability of future space missions, representing a significant market failure with negative externalities for global communication systems. Many economists argue that establishing clear, tradeable private property rights over specific orbital altitudes is essential to prevent 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.
