Great Power competition is back, and it’s headed to the stars once again. On one side is an international coalition led by the United States, committed to exploration and commercial development. On the other side are the rogue nations of Russia and China. Russia’s glory days in space are behind it, but it still has the capacity to harm U.S. interests. China, on the other hand, is an up-and-coming space power determined to increase its sphere of influence both on the earth and above it.
This past October, eight nations — the U.S., Australia, Canada, Italy, Japan, Luxembourg, the United Arab Emirates, and the United Kingdom — signed the Artemis Accords, a cooperative agreement for the peaceful uses of outer space. Russia and China were decidedly unimpressed. They recently signed a memorandum of understanding to partner on the construction of a lunar research base. Since President Biden reaffirmed American commitment to the Artemis Accords as a foundation for future moon missions, the Russia–China agreement is a clear challenge to the vision of the U.S. and its allies.
Realpolitik is a basic fact of international relations. We can’t eliminate it. But we can mitigate it, by creating governance institutions for space that incentivize governments to play nice. What we need is a clear and effective property-rights regime for celestial resources.
Each year, the global space economy (public and private) generates somewhere between $360 billion and $415 billion in revenue. Industry analysts predict explosive growth in the coming decades. For example, Morgan Stanley believes the space economy “could surge to over $1 trillion by 2040,” with most of the growth coming from the private sector. Developments in the space economy are accelerating and increasingly diverse: Activities that were previously the purview of science fiction, such as asteroid mining and in-situ resource utilization, will soon be feasible. We must clarify the property-rights system sooner rather than later.
Public international space law is largely ambivalent about property rights. The 1967 Outer Space Treaty, still the bedrock governing document, is silent on the matter. However, one of its articles forbids “national appropriation by sovereignty,” which poses difficulties for property rights. In short, no national jurisdiction, no enforceable property rights. But recent developments are much more encouraging. Friendly nations such as Luxembourg, Japan, and the UAE have either passed legislation or are taking up serious discussions about this issue. Importantly, the signatories of the Artemis Accords “affirm that the extraction of space resources does not inherently constitute national appropriation under Article II of the Outer Space Treaty.” Score one for commerce.
Unfortunately, Russia and China view the Accords with suspicion, seeing them as a thinly veiled attempt to promote U.S. hegemony in space. Their paranoia says more about their ambitions than ours. Nevertheless, to keep the peace in orbit and beyond, we must take the concerns of these nations seriously. America needs to sweeten the pot.
China and Russia’s obstreperousness is understandable, if not defensible. They currently lag the U.S. in space capabilities. Any international system for extracting and using space resources will benefit current space leaders. It is up to the U.S. to assure its competitors that it is not trying to monopolize space wealth.
U.S. government cooperation with Russia continues for now on the International Space Station, but that may be ending. Russia’s space agency wants to build its own space station by 2030 and insinuated it would leave ISS some years before that. Furthermore, commercial activities between the U.S. and Russia are now limited because of Moscow’s continuing use of chemical weapons against its citizens, especially political dissidents. As for China, the Wolf Amendment prevents U.S. government space cooperation with Beijing based on human-rights considerations, but a longer litany of intellectual-property violations and other anti-competitive behavior significantly limits the potential for commercial cooperation.
How can the U.S. bring Russia and China to the table? First, we should consider targeted agreements with these nations in space ventures. In the case of China, this requires explicit congressional approval. Sending out cross-party feelers while maintaining a tough stance overall provides the right combination of carrot and stick. Second, the U.S. should credibly commit to limit its homesteading claims. In other words, the government should prevent overly expansive initial resource claims by U.S. nationals. The low-hanging fruit of accessible water and minerals, which depend on technological capabilities the U.S. is uniquely well-positioned to achieve, is scarce. By exercising restraint in its resource claims, the U.S. can signal to its competitors that space is big enough for all of them.
Commercial ties often work well in securing peace among nations. Bombing your trading partner is bad for business. Erik Gartzke, a political scientist at the University of California, San Diego, calls this the “capitalist peace.” As on earth, so in space: Countries will hesitate to interfere in each other’s space operations if it means forfeiting economic gains from space wealth. China and Russia will probably never sign the Artemis Accords, but they don’t need to. As long as we make trading rather than raiding worth their while, we can prevent celestial conflict from escalating.
Alas, no strategy for peace in space is foolproof. Economic self-interest by itself can’t guarantee good behavior. Russia’s experience with markets transformed it into a gangster state. China’s recent behavior shows private enterprise is all too compatible with domestic control and international aggression. Nevertheless, securing buy-in from these potential rivals is essential for mankind’s future in space. Property rights to space resources are key to promoting good celestial citizenship.
Kevin O’Connell is the CEO of Space Economy Rising LLC and was formerly the Director of the Office of Space Commerce in the U.S. Department of Commerce. Alexander William Salter is an associate professor of economics in the Rawls College of Business at Texas Tech University and a research fellow at TTU’s Free Market Institute.