Journal of Space Safety Engineering 10 (2023) 66–69

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Journal of Space Safety Engineering

journal homepage: www.elsevier.com/locate/jsse

An estimate of expected economic losses from satellite collisions with

orbital debris ✩
Nodir Adilov a,∗, Vitali Braun b, Peter Alexander c, Brendan Cunningham d
a
Purdue University Fort Wayne, 2101 E. Coliseum Blvd., Fort Wayne, IN 46805, United States
b
IMS Space Consultancy at European Space Agency, Germany
c
Federal Communications Commission, United States
d
Eastern Connecticut State University, United States

a r t i c l e i n f o a b s t r a c t

Article history: We estimate the expected annual cost of satellite collisions with orbital debris and find that the expected
Received 23 July 2022 annual loss for all orbits was $86-103 million in 2020. Nearly all expected losses, $79-102 million, were
Received in revised form 22 December 2022
in LEO, and these losses represent approximately 0.16% of the value of operational satellites in that orbit.
Accepted 16 January 2023
Over 70% of losses occurred in the 60 0-90 0 km orbital band. Commercial satellites’ share of expected
Available online 28 January 2023
losses is approximately one-third of expected total losses. These findings may have implications for policy,
Keywords: in particular relating to the market for active debris removal.
Orbital debris © 2023 International Association for the Advancement of Space Safety. Published by Elsevier Ltd. All
Collision losses
rights reserved.
Economics of space

Introduction
Orbital debris is hazardous to satellites in orbital space, as
collisions with debris can destroy satellites or render them non-
operational. Studies suggest that a continuous increase in the
quantity of non-functioning human-made objects in space may
generate a Kessler effect, which may make some orbits unusable
[1,2]. Despite a common interest among space-faring nations to
limit pollution of Earth’s orbits and the adoption of voluntary de-
bris mitigation guidelines [3,4], the number of debris objects is in-
creasing [5,6]. Theoretical research on the economics of orbital de-
bris suggests that in the absence of a proper incentive structure,
self-interested firms will generate more debris than socially opti-
mal due to the free-rider problem, as firms only consider the costs
of orbital debris on their own satellites [7–11]. The direct cost of
orbital debris for satellite operators is the cost due to collisions of
their satellites with debris.
We measure the annual cost imposed on satellite owners in
terms of expected loss of satellites from collisions with debris. The
analysis is useful because it allows us to better understand the
economic pressures orbital debris imposes on satellite operators,
and provides information on potential demand regarding the mar-
✩
The ideas expressed in this article are those of the authors and expressly not
those of the European Space Agency, the Federal Communications Commission, or
the United States Government.
∗
Corresponding author.
E-mail address: adilovn@pfw.edu (N. Adilov).
ket for debris removal. It also provides a valuable benchmark for
policymakers, researchers, and satellite operators.
Other studies that explore the economics of orbital debris an-
alyze the impact of various debris mitigation and reduction pol-
icy options, including taxes, orbital use fees, and debris removal
[9,12–15]. These studies rely on behavioral assumptions regarding
space actors in their analysis. Because this paper does not focus on
comparing the effectiveness of various policy options, it does not
make behavioral assumptions in its analysis. Instead, it measures
expected costs based on physico-economic conditions in Earth’s or-
bits. The unique feature of the paper’s approach is that it calculates
expected annual losses using the replacement value of satellites,
which is more closely related to costs faced by commercial satel-
lite operators.
Data and methodology
The data on active satellites are from the Union of Concerned
Scientists, for the 2020 calendar year [16]. We cross-referenced
these data with the Database and Information System Character-
ising Objects in Space (DISCOS), and obtained cross-sectional area
information on the objects. The collision probabilities are obtained
from the Meteoroid and Space Debris Terrestrial Environment Ref-
erence (MASTER) model. For operational satellites missing some
information needed for the analysis, we imputed the missing val-
ues.1 We did not include the International Space Station in our cal-
1
In our dataset, about 5% of the satellites were missing some information.

https://doi.org/10.1016/j.jsse.2023.01.002
2468-8967/© 2023 International Association for the Advancement of Space Safety. Published by Elsevier Ltd. All rights reserved.
N. Adilov, V. Braun, P. Alexander et al.
Table 1
The total value of all satellites in 2020.
Type of Total value of satellites (millions of USD)
orbit N (1) (2)
LEO 2777 50,684 54,264 - 65,116
MEO 141 8,820 - 10,584
GEO 571 113,379 - 136,055
Elliptical 59 5,155 - 6,186
All 3369 181,618 - 217,942
culations because our methodology applies only to individual satel-
lites.
For a given orbital type K, we calculate the expected annual loss
(EL) from collisions as:

ELK = wi pi vi
i∈K
where pi is the annual collision probability of satellite i with ob-
jects 1 cm or larger in diameter, vi is the replacement value of
satellite i,2 and wi is the fraction of the year satellite i was in or-
bit in the year 2020.3 To calculate the value of a satellite, we use
the approximation formula presented in Kunstadter [17], which de-
scribes the insured value of satellites:
vi = 52, 253m0i .9843
In (2), mi is the mass (in kilograms) of satellite i. We use the
approximation given by Eq. (2) because satellite-specific produc-
tion and launch costs are proprietary and unavailable to the pub-
lic. Importantly, Eq. (2) is based on actual data of insured satellites,
which [18] clarifies includes the cost of manufacturing the satellite,
the launch cost, and the capitalized interest cost. This is essentially
the cost a satellite operator would incur to replace a lost satel-
lite. According to [17], the calculations using (2) are accurate for
satellites in LEO, but not for other orbits. Therefore, Eq. (2) is used
only for calculations involving LEO satellites. We refer to these es-
timates as model 1 estimates. In addition, we perform the cal-
culations using the approximation presented by Daehnick et al.
[19] and refer to it as model 2 estimates. In our analysis, we em-
ploy both methods to calculate the expected annual loss to satellite
operators. As shown in the next section the calculations based on
Daehnick et al. [19] yield slightly higher satellite value estimates
(for LEO) than those based on the formula derived in Kunstadter
[17].
Results
The estimated values of satellites in LEO, MEO, GEO, and ellipti-
cal orbits are presented in Table 1. Column (1) represents the val-
ues calculated based on [17], and (2) represents the values based
on [19]. As noted in [19], the per kilogram cost of satellites is be-
tween $50,0 0 0 and $60,0 0 0. These values represent the combined
value of all satellites (commercial and non-commercial) in a given
orbit. As can be seen in the table, the total value of satellites in all
orbits range from $182 billion to $218 billion. GEO has the highest
total value of the satellites – between $113 billion and $136 billion.
The total value of satellites in LEO ranges from $51 billion to $65
billion.
Table 2 yields the estimated expected losses to satellite opera-
tors due to collisions with orbital debris. The highest expected loss
occurs in LEO due to the higher debris flux, where the estimated
value of expected losses is between $79 million to $102 million.
Figure 1 graphs expected losses by orbital bands in LEO. The
highest expected losses are at altitudes between 600 to 900 km
2 4
Values in 2020 US dollars.
3
v = 1 for satellites that were operational for the whole year.
Journal of Space Safety Engineering 10 (2023) 66–69
Table 2
The expected value of annual satellite losses.
Type of Expected value of annual losses (millions of USD)
orbit (1) (2)
LEO 78.62 84.81 - 101.77
MEO 0.02 - 0.03
GEO 0.88 - 1.05
Elliptical 0.26 - 0.31
All 85.97 - 103.16
above Earth’s surface, which generates close to 72% of expected
losses from collisions with orbital debris in LEO. Expected losses
peak at the altitude between 600 to 700 km.
Figure 2 shows the percent of expected losses attributable to
(1) collisions between orbital debris and commercial satellites by alti-
tude.4 The total value of expected losses to commercial satellites is
between $28-33 million, representing approximately one-third of
total expected losses for all orbits. MEO, which contains global po-
sitioning satellites, has the highest share (94%) of potential losses
to commercial satellites. The commercial sector’s shares of losses
are about 73% for GEO and 32% for LEO.
Approximately 71% of LEO satellites are commercial. Note that,
despite a higher percentage of commercial-use satellites, commer-
(2) cial satellites represent a smaller fraction of potential losses in LEO.
One possible explanation for this finding is that commercial satel-
lites are typically smaller in mass than non-commercial satellites.
For example, the data reported in [20] shows that the annual av-
erage mass of commercial LEO satellites launched between 2016-
2020 varied from 153.2 to 205.4 kilograms, while the annual aver-
age mass of non-commercial LEO satellites launched in the same
period varied from 457.5 to 687.5 kilograms.
Discussion and policy implications
We estimate the expected economic cost of collisions of satel-
lites with orbital debris, where satellites are valued at replacement
cost. The analysis reveals that the expected annual loss is currently
between $86-103 million, which represents approximately 0.05% of
the estimated value of operational satellites ($182-$218 billion) in
2020. The expected losses are significantly higher in LEO (which
has the highest quantity of tracked space debris) with losses rang-
ing between $79-102 million annually, representing approximately
0.16% of the replacement value of satellites in LEO. In fact, over
70% of expected economic losses are concentrated in the 600 to
900 km orbital band. The share of losses for commercial satellites
is approximately one-third of total expected losses.
These findings may have policy implications. For example, while
a collision with orbital debris is a concern for satellite operators,
our estimates imply that other risks, such as launch failure, may
generate higher expected losses. Historically, launch failure rates
fluctuate around 5% [21], while the estimates presented here imply
the expected annual losses due to collisions with debris are below
0.2% of the aggregate value of all satellites in LEO. Thus, individual
satellite operators have relatively weak incentives to mitigate or
remove orbital debris. This is consistent with the findings of theo-
retical economic models that predict higher levels of orbital debris
generation by an unregulated market compared to what is socially
optimal [7–11]. Importantly, continued accumulation of debris will
have a cumulative effect on the orbital environment and signifi-
cantly reduce the economic value of certain orbits. Thus, a policy
intervention or coordinated action by space-faring nations will be
necessary to mitigate the problem [6].
Satellites with a dual purpose (commercial and non-commercial) are classified
as commercial satellites.
67
N. Adilov, V. Braun, P. Alexander et al. Journal of Space Safety Engineering 10 (2023) 66–69

Fig. 1. Expected satellite losses due to collision by altitude.

Fig. 2. Commercial sector’s share of expected losses.

The European Space Agency contends that active debris removal
is the only viable option for reducing the number of extant large
objects in LEO, and the global impact of removing a particular de-
bris object should be taken into account when selecting objects for
removal [22,23]. Our estimates facilitate a comparison of expected
annual satellite losses to current expenditures on active debris re-
moval. Based on [24], the total global market for debris removal
and debris monitoring was $803 million in 2020, where roughly
a quarter of the market share consisted of debris removal. Given
the total value of expected losses for only commercial satellites is
between $28-33 million annually, the demand for debris removal
from the commercial sector alone will not be sufficient to sus-
tain current investments in debris removal technologies. We note
in this regard that the European Space Agency purchased a con-

68
N. Adilov, V. Braun, P. Alexander et al.
tract with ClearSpace for $104 million to remove a piece of space
debris weighing 100 kilograms [25]. At about $1 million per kilo-
gram, a private commercial operator’s expected losses will not de-
crease sufficiently to justify paying for this debris removal. Thus,
the demand for debris removal will come, at least in part and in
the near term, from the public sector.
Declarations of Interest
The authors declare that they have no known competing finan-
cial interests or personal relationships that could have appeared to
influence the work reported in this paper.
CRediT authorship contribution statement
Nodir Adilov: Project administration, Conceptualization,
Methodology, Formal analysis, Writing – review & editing. Vitali
Braun: Methodology, Formal analysis, Writing – review & edit-
ing. Peter Alexander: Conceptualization, Methodology, Writing
– review & editing. Brendan Cunningham: Conceptualization,
Methodology, Writing – review & editing.
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