Space Economy—Space Security Nexus: In Search for Common Ground

When we talk about ‘space economy’, what comes up to our mind? The issue of its definition and measurement, ambiguousness that exists regarding the scope of downstream, upstream and even midstream segments of space economy. Deliberations over the estimates of space economy volume and its role in achieving the Sustainable Development Goals—the immense influence of telecom, navigation and Earth Observation on boosting industrialization, eradicating poverty and monitoring effectiveness of climate actions.

But do we realize how much space economy is intertwined with space security agenda? Some experts may say that underlining this linkage is an attempt to securitize the agenda and incorporate quite peaceful activities into the realm associated with the continuing race for military dominance in space. I would argue that space is to be dealt with as the unique domain, whose primarily geopolitical function has not seen much change during either Space 1.0, Space 2.0 or the ongoing Space 3.0 development stages. Since the 1970s, outer space has gained the utilitarian function, but it has never dissociated with its military-political routes.

What we largely witness today is a lack of trust among space powers, as much as the holders of state sovereignty and state military might, leading to an uncertainty among those who came into space to gain profit, or earn social benefit for the population, or both. Any space company, regardless of its geographic representation or market maturity, shall be ready that its already quite volatile, paying off in a while venture may get riskier. Or worse, become party to an Earth-based or space-based conflict with unknown repercussions. The situation is only aggravated by the stalemate in space security negotiations and de-facto fragmentation of international space law as a result of contradicting approaches.

In this context, Russia and China as prominent spacefaring nations sharing similar global development values could contribute to deepening an understanding of existing space economy—space security nexus, utilizing existing levers to make space diplomats and space companies agree upon acting in a mutually beneficial, sustainable manner.

When we talk about ‘space economy’, what comes up to our mind? The issue of its definition and measurement, ambiguousness that exists regarding the scope of downstream, upstream and even midstream segments of space economy. Deliberations over the estimates of space economy volume. Will it generate 700 billion dollars by 2030, surging up to 1 trillion dollars by 2040? How many jobs will be created in related industries? Whose and what investments are shaping the current space economy landscape? Space Investment Quaterly claims, for instance, that cumulative private market equity investment amounts today to more than 280 billion dollars. What to expect next?

Within this conversation, we reasonably touch upon the role of space economy in achieving the Sustainable Development Goals—the immense influence of telecom, navigation and Earth Observation on boosting industrialization, eradicating poverty and monitoring effectiveness of climate actions. All of these are systematically articulated within UN COPUOS, its sub-committees and other respective fora, not to mention the focus of the recent UN Policy Brief published in the run up to the forthcoming Summit of the Future.

But do we realize the context impacting the pace of space economy development? Or, in other words, do we really comprehend space economy as being directly intertwined with another “space” element?

The building block I imply in this context is space security. Some experts may say that underlining this linkage is an attempt to securitize the agenda and incorporate quite peaceful activities into the realm associated with the continuing race for military dominance in space. I would argue that space is to be dealt with as the unique domain, whose primarily geopolitical function has not seen much change during either Space 1.0, Space 2.0 or the ongoing Space 3.0 development stages. Since the 1970s, outer space has gained the utilitarian function, but it has never dissociated with its military-political routes. Even now, when we are witnessing an ever-increasing rivalry for space resources, space energy and establishment of space infrastructure, including cislunar bases and routes, space landscape and especially its future configuration, are shaped by the unresolved security issues in space.

Can’t oversight the Military

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Legal vagueness and a lack of trust among space powers, as much as the holders of state sovereignty and state military might, lead to an uncertainty among those who came into space to gain profit, or earn social benefit for the population, or both. In this particular case, we set non-security issues aside, particularly those related to space safety: the question of gaps in space traffic management and space situational awareness, resource extraction, debris that will multiply at this juncture, even if humanity gives up space exploration. These are not indispensably the products of intentional actions, motivated by space politics—but rather side-effects of the slowdown in international space law negotiations (including in regard to prevention of an arms race in outer space (PAROS)). So let us focus precisely on space security in its traditional sense.

Why would private space companies care about space security dynamics? The answer may be two-sided. First, whatever the professional debate on outer space security or diplomacy you listen to, space experts would claim that all these years and especially in the 21^st century, spacefaring nations live in a state of permanent mistrust. They do not come up with new agreements but for those five treaties and the consequent recommendations and guidelines on certain narrow issues because there is no political will to be transparent and frank with the counterparts. Outer space activities enable and nurture this “concealment” mode. Moreover, even if the state traces and tracks space activities of another state, it still cannot be sure about its motives.

Eventually, the combination of Terra relations, misperception of intentions in space and an absence of clear understanding of the other side’s space capabilities lead to even greater mistrust among spacefaring nations. Amidst no legal answers on what is permitted in outer space and what is not, states are held hostage to the matter of chance. In line with the Article VI of the Outer Space Treaty this may be read as the space companies that are dependent on states providing authorization and continuing supervision (so the companies are the part of the nation-based space ecosystem) have to rely on the matter of chance. Any space company, regardless of its geographic representation or market maturity, has to be ready that its already quite volatile, paying off in a while venture may get riskier.

Second, if we agree that outer space is just another domain for projecting power, then it serves for extension of Terra policies to yet another dimension. Hence, what happens nowadays on Earth may be transferred to space. With Terra conflicts ongoing, global supply chains get disrupted, transport and logistical routes blocked, while the financial system is undermined. Overall, we speak about transformation of favorable conditions for economic activities into unfavorable ones.

The same will apply to outer space. If there is conflict, then the conditions may turn into unsuitable for any space operation. Even not being a target, neighboring satellites or stations may get defunct to this or that D-extent [1]—depending on the chosen enforcement tool. Omitting the contemplation over unpredictable in terms of scope and severity terrestrial effects, we may presume that space companies will no longer be able to provide services to customers, expectedly loosing in commercial viability. In these circumstances as the next step, like in Terra case, business will have a choice—either to seek financial assistance and upgrade its business model in order to adapt to the new reality, to go bankrupt if costs are overwhelming, or to integrate into the ongoing conflict, so as to secure long-term state contracts and state support. There are already signs that some companies will choose this path, based on their involvement in the ongoing Ukraine conflict. However, if the military activities are extended to or unveil in outer space and space companies follow the suit, embedding into state defense industry, they will hardly avoid becoming a legitimate target for the opponent.

Tangled present

Adding the urgency to the issue is the substantial pressure faced by the space security debate. Since recently at the heart of the PAROS discussion has been a profound dichotomy in interpretation of what space security implies. Some representatives have a targeted military-oriented perspective whereas others blur the lines and claim it encompasses space safety and sustainability, as space “is a completely dual use and holistic area”. Whatever the case, the open-ended working group (OEWG) on reducing space threats, convened under UNGA resolution A/76/231 partially to find out the common ground on the issue, failed to achieve consensus this year.

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Then, there is no agreement over the path to follow—shall it be a legally-binding treaty or a package of voluntary measures to ensure space security. As demonstrated by the same OEWG (though also articulated well in advance of the group’s meetings), many experts give preference to supplementing the current space rulebook with voluntary action, transparency and confidence-building measures (TCBMs). This approach is characterized as less formal and less technical, prioritizes the common interests of stability, protection and humanitarian obligations. Even though, participants of the OEWG agree that despite the approach’s merits, the end goal should be the negotiation of a legally binding treaty on international space security. Apparently not all the state representatives are sharing this perspective, thus we do not witness any (commonly underpinned) progress—rather emergence of initiatives seemingly deepening the divide between two camps.

In this vein, the future of the Russia-China proposed Treaty on Prevention of the Placement of Weapons in Outer Space (PPWT) remains unclear. While some pundits think [2] of how to resolve outstanding issues—lacking agreement on the term “space weapon” and inability to compromise the verification part—nothing happens in respective fora.

In addition, from the angle of working mechanisms, there is, on the one hand, the deadlock of the Conference on Disarmament. On the other hand, there is an absence of a formal mechanism to provide notifications prior to military exercises, to compare approaches to the escalation ladder and to share data as part of conflict resolution and prevention attempts—all of these adding to mistrust and misperceptions.

The direction of multilateral negotiations therefore does not pave the path to the much anticipated trust and predictability in outer space. By contrast, the observed dynamics question the call to invest in space activities, start space business or integrate into respective supply chains.

Maze running

To prevent the conflictual scenario, whose repercussions will be crucial for both non-governmental and governmental space actors, states have to negotiate. Currently, we are witnessing the ongoing trend for reincarnating multilateralism with Russia and China at its core versus the U.S.-led formation of blocks and exclusive clubs of interest. Presumably, it is high time for Russia and China to gather like-minded partners, primarily from the Global South and Global East, and start the new round of discussion on space security matters—emphasizing that the latter is a prerequisite to ensure space economy stability and flourishment. Below are several potential characteristics of this endeavor.

The discussion shall, first, take place at the multilateral fora that proved their readiness to resist the ongoing trends, including protectionism, unilateral restrictive measures and neglection of multilateralism. The better candidates for deepening the dialogue are BRICS with its six newcomers, Shanghai Cooperation Organization (SCO), potentially Conference on Interaction and Confidence Building Measures in Asia (CICA). Respect for each other’s sovereignty, recognition of outer space as the global commons, adherence to the rule of law are essential to this conversation.

Second, the countries could win from clear articulation of space economy—space security nexus. This is not to be perceived as a proposal to mix agendas. But rather to promote and unveil them in a balanced manner, in parallel, because currently PAROS agenda prevails the space economy issues in both BRICS and SCO. Meanwhile it is critical to interlink the urgency of progress on PPWT and “No First Placement of Arms in Outer Space” resolution—with the space business’s request for legal and thus financial certainty. The parallel task would be to formulate and reiterate to space companies along with state bodies, why utilization of civilian infrastructure in military purposes is more a curse than a blessing—especially from the long-term sustainability (LTS) of outer space activities perspective.

And third, regarding the format of the potential deliverables of such a discussion. Leaving the room for interpretation of the following suggestion, it is to be noted that recently we have witnessed the increase in emergence of coalitions—coalitions around particular topics, coalitions at the center of which are voluntary commitments. For instance, the one on banning destructive DA-ASAT testing [3]—which by the way was successfully conducted by four countries, and is now suggested to be ceased as if a sign of good will. Strikingly those who cherish the initiative recognize that it scales down kinetic testing only, letting the technology itself upgrade and be tested with other means. Thus, the “capability neutral approach” welcomes more genuine and tech-savvy minds. Another example of a voluntary commitment is the one on extraction and utilization of space resources—that made the national vision of the Article II of the Outer Space Treaty the multilateral norm. Not to mention the initiative on responsible behaviors that came into existence in parallel with one country’s National Space Policy that envisaged gaining leadership in space through promoting a framework for responsible behavior in outer space. The work of the OEWG that was established in line with this initiative yielded certain fruit—diverse stakeholders gathered to take stock of existing international legal and other normative frameworks, current and future threats to space systems. Nonetheless, generally the exchange of opinions confirmed existing space security dichotomies mentioned above, and even exacerbated them, not least due to the nature and background of the initiative.

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Discourse Has Changed From Space as a Sanctuary to the Next Warfighting Domain

If not at the state level, let us look at another voluntary initiative: Space Sustainability Rating (SSR) inspired by the World Economic Forum’s Global Future Council on Space Technologies. This scoring is designed to quantify and measure sustainability decisions taken by operators (during the design, the operation and end of life of a space mission), and define whether they deserve Bronze, Silver, Gold or Platinum status. If the world community did not experience the introduction of anti-competitive measures under the guise of environmental protection, the SSR would have seemed more trustworthy.

Notably, all these voluntary initiatives were generated first if not within one state, then within one block of countries and ultimately offered to a larger international audience. These initiatives are posed as non-binding and free to follow—the argument that allures many states, including those from the Non-Alignment Movement, who reckon they will be able to maneuver once decided. However, could we imagine the parties of these commitments to violate the norms they subscribed to? In the current international order? Without economic or reputational risks?...

Whatever the answers, the key point here is that these are examples of states and companies gathering around voluntary initiatives that will supposedly strive to have larger geographic impact and presumably will not put up with rule-breakers. Russia and China do not have to necessarily follow the path. But both countries shall definitely keep in mind the existence of such instruments, forecast their impact and make sure they’ve done their best to defend their own national interests. The states could potentially diversify their negotiation toolbox—still in the framework of their basic principles.

* * *

Concluding, the initiative of bringing to the table the matter of space economy– space security nexus may seem controversial. The clear division of both within multilateral platforms helps negotiators streamline the debate, making sure that the experts possess quite the same competence and do not have to jump from one agenda to another like jack of all trades, master of none. But the very idea is not to alter the state of affairs. It is to highlight and convince all the space actors that these two realms are equally important and mutually complementary.

Space diplomats dealing with space security portfolio have to admit the urgency of coming to the next milestone (agreed report of the forthcoming Group of Governmental Experts on PAROS or consensus on terminology, etc.) in order to enhance trust of space companies in the profitability and worthiness of their ventures. Any consensus-based supplement to the current legal framework shall be considered as the direct contribution to the well-functioning and stability of space economy and thus global economy and well-being as a whole.

For private space companies, to which can be attributed around 78% of today’s global space economy, it is crucial to clearly understand space security implications, grey areas in the international space law as well as consequences of providing primarily civilian space infrastructure for the military needs. The question is not only about staying LTS-responsible, responsible from the humanitarian lens. But also about risks for the business’s ability to satisfy the customer’s demand—in case of response attack by the adversary. [4] All in all, determination not to militarize on behalf of these entities in its turn will make the governments admit that the resources they may convert to military use are not unlimited and thus adjust negotiation strategy.

Russia and China, having a substantial background in space-related negotiations along with playing a key role in the dynamically evolving multilateral groupings, could bring forward the idea—on either side, among space security diplomats or space business. Both countries have the leverage and the interest in conveying the message. As for the formats of promoting the discussion, there are options available.

The article draws on the talking points for the International Round Table “The Role of Law in Increasing the Social and Economic Benefits of Space Projects” held by Shenzhen MSU-BIT University Center for Comparative Law (October 20, 2023).

1. The author means the opportunities to deceive, disrupt, deny, degrade, or destroy adversary space capabilities.

2. International space security mechanisms: current status and analysis of their limitations in the context of the prevention of an arms race in space / E. Drozhashchikh, L. Farrar, K. Grattan et al. // IAC 2022 Congress proceedings, 73rd International Astronautical Congress (IAC), Paris, France. International Astronautical Congress France: 2022.

3. Kinetic, direct-ascent anti-satellite testing generating space debris.

4. The author recognizes that the thesis first and foremost applies to the companies with a balanced civil-military contracts ratio, for which such an attack will affect the essential source of income.