Bonds improve post mission disposal compliance and the sustainability of low Earth orbit

Abstract

Post-mission disposal (PMD) non-compliance threatens the long-term sustainability of Low Earth Orbit (LEO). Between 2010 and 2024, only 40% of satellites in non-naturally compliant orbits successfully deorbited. As launch rates and large constellations expand the active population, reducing satellite derelicts is increasingly urgent. We evaluate an escrow-based PMD performance bond that makes non-compliance financially costly while preserving access to orbit. The analysis couples an economic model of operator decision-making with a model of LEO population evolution, allowing launches and debris risk to co-evolve over 25 years. Bonds of $200,000 per satellite reduce derelict satellite mass per year by more than one-third and increase welfare by up to 27%, while bonds above $1 million show diminishing marginal returns. Even partial adoption can be effective: a bond covering 20% of the global market still improves sustainability under all levels of market leakage, although broader participation delivers greater environmental and economic benefits. Growing satellite populations and unreliable operational behaviour could lead to an increase in orbital debris. This study finds that refundable performance bonds can encourage safer disposal, reduce long-term space debris and improve economic welfare, even when only part of the market adopts them.