A Way to Make Space a Common Benefit For All Mankind
To fully enjoy reading this post, listen to Money by Pink Floyd and Space Cowboy by Jamiroquai.
Space and taxes, what do they have in common? The former is up in the sky, the latter are down to earth, nevertheless there could be same resemblances. Until a few years ago, space was an environment accessible only to national agencies, supported by a few industries for pure manufacturing. Nowadays, we see a rapid increase of its commercialization and the beginning of a true space economy: private companies are not only providing hardware and services to national agencies, but also to other companies and entities, thus starting a new market. On the other hand, the widely undersigned UN Outer Space Treaty introduces an important concept: “the use of outer space shall be carried out for the benefit and in the interests of all countries”. This is stated even more strongly in the less popular UN Moon Agreement, affirming that space resources “are the common heritage of mankind”. In a sense, these two similar principles mean that the wealth generated by space exploitation should be shared between all countries, no one excluded.
So, how to reconcile this new richness with its fair distribution? The following example could be of help. Let’s consider space as a resource, in particular the space around the Earth, nowadays much in demand for positioning satellites of all kinds. A tax system could be introduced to allow a spacecraft to occupy a specific orbit. It could be similar to the one used to regulate the radio spectrum allocation (like 3G, 4G, 5G). The license could give the owner of the spacecraft the right to occupy a specific orbit, transforming in this way a space resource into money. Then, a fair way to share the cosmic nest egg could be to feed directly the UN Sustainable Development Goals (SDGs) program. In particular, in could be used to accelerate the achievement of goals like SDG 1 “No Poverty” and SDG 2 “Zero Hunger”, but also the other fifteen which deserve to be sustained since the whole world benefits from them.
That orbital licensing framework could also have the possible interesting side effect to mitigate the space debris problem: if a company had to pay money to occupy an orbit for a spacecraft no longer operational, they would be really interested in its removal. Even more, if the spacecraft were to occupy an unauthorized orbit, a penalty could be applied and, once again, the company would have the right motivation to actively work for its displacement. In the end, it would help to regulate the use of Earth’s orbit, avoiding unpleasant overcrowding effects and mitigating the significant risk of collisions, which is actually not negligible at all.
What about space tourism? Currently a topical media item, thanks to the suborbital flights of Richard Branson (see Travel to Space for more details) and Jeff Bezos, it is triggering discussions about money invested to achieve such results and the money wealthy people are prepared to spend to replicate similar trips into space. Without considering that this new market is producing wealth and jobs for many people, an extension of that tax system could also be applied to it, in terms of issuing flight licenses to companies, to be managed not locally for the use of atmospheric airspace, but internationally for the flight in outer space. Perhaps the discussed astronaut wings could be issued following the payment of a fee to the entity managing the new fiscal framework. SDG 10 Reduced Inequalities could be a very good candidate to receive those benefits, in particular the related Access to Space for All initiative.
The most promising scope for the new space tax system could be the wealth deriving from space resource mining (see Asteroids: Cross And Delight and A Moon of Opportunities for more details). This matter is not at all easy to manage, since only a portion of the resources in the asteroid belt could be worth trillions of dollars. Furthermore, it could generate serious problems with the world economy, if suddenly thrown into the commodity market. A potential solution could be to introduce another tax system extent that mimics the one used by countries in the mining industry. This framework should include not only mining licenses, but also a set of royalties based on type and quantity of the extracted materials. Introducing that fiscal mechanism would have two positive consequences. It could be used to control the price of resources mined in space to avoid a crisis on the existing raw material market and on the world economy. Hence, the considerable amount of money generated could sustain once again the UN SDGs program all over the world.
And now a tricky question: who or what should handle such a huge bureaucratic and economic power? As advocated by the Moon Agreement itself, it should be an “international regime”, acting in the name of all mankind and of all the nations. What could be better than the United Nations themselves? Instead of creating a new entity, an interesting choice could be to empower the UN Office of Outer Space Affairs (UNOOSA), which is already dealing with many space programs and related initiatives. In particular, the Committee on the Peaceful Uses of Outer Space (COPUOS) seems the right entity. It is serviced by UNOOSA and its mandate is to strengthen “the international legal regime governing outer space, resulting in improved conditions for expanding international cooperation in the peaceful uses of outer space” and to “maximize the benefits of the use of space science and technology and their applications”. It would just be a matter of developing its structure and empowering it to define the Outer Space Tax (cool name, even for a tax!) framework and operate it. As part of the United Nations, UNOOSA could easily create the right interface to the SDGs program and collaborate with other UN programs like UNICEF or agencies like FAO with the aim of accelerating further the achievement of those ambitious targets. It would be important to avoid giving money directly to local governments, and elude possible difficulties related to benefits reaching the population and the natural environment’s restoration.
Speaking of timing, in the first stages the Outer Space Tax should be used to track the activities, issuing licenses at little cost for a limited time, until the space business picks up. Currently, it could already be applied to the Earth’s orbit management, very soon also to space tourism, while for resource mining it could take much longer. This last activity is today hardly more than an engineering exercise, with many scientific studies, private and public initiatives underway, and it is obviously far from being an economic ecosystem. At this pioneering stage, it is more of an investment, receiving public money through the national space agencies, than a wealth generator. However, the technology will develop quickly and soon spacecrafts will be wandering in space hither and thither to mine asteroids, the Moon and even other natural satellites and dwarf planets. Thus, after this initial phase, licenses and royalties should be applied consistently.
In case of space resources, royalties should relate first to the materials brought to Earth, so that they can be easily classified, quantified and possibly controlled. The in-situ utilization of space resources should be left initially tax free, since this facilitation will avoid adding costs to the first space constructions, already expensive as such. When the space construction business also becomes economically profitable, the Outer Space Tax should then be applied to all mined space resources.
Of course it wouldn’t be possible to collect the due relying only on the good will of all the involved parties, not everybody is happy to pay taxes. In order to be completely operational, UNOOSA would need to be equipped its own “space force”, a kind of cosmic Blue Helmets, to control space activities and apply the agreed rules.
As said, nowadays things are moving fast around space and we should start thinking about a set of rules for the exploitation of space, starting from the general principles already agreed by the world nations. Leaving the field to the single nations or companies’ initiatives could enhance the risk of transforming Outer Space in the new Far West, instead of providing benefits to all mankind. Maybe this Outer Space Tax idea is too simple, or inapplicable. Maybe there are important aspects still to be taken into consideration, since these are just the thoughts of an average individual with no expertise in international law or in tax law. However, the need for a set of new rules for the new space world is there and it is increasingly important every day. In the end, we should become Spacepolitans, not space cowboys, shouldn’t we?
Becoming Spacepolitans 