An Analysis of the Channels for Accessing Economic Benefits in the Commons Governance Regime of Space Resources

2.1 The Importance of incentive mechanism to the Commons Governance

The channels for accessing economic benefits are important for gaining national support for a commons governance regime. After all, states will establish and maintain a commons governance regime only if the perceived benefits outweigh the perceived costs (Hagen and Crombez, 2018). In particular, incentives for spacefaring nations are significant. As of 2022, only eleven countries have the ability to launch objects with their own launch vehicles, while only three have manned spaceflight technology (Koop, 2022). Thus, space powers are key actors in both exploring and utilizing outer space. According to the norm life cycle model, “norm cascades” require the support of “critical states” (Finnemore and Sikkink, 1998). In addition to spacefaring nations, other countries should also be encouraged to participate in commons governance or space resources. Under Article I of the Outer Space Treaty, exploration and use of space are the “province of all mankind”. According to Article 11(1) of the Moon Agreement, “the Moon and its natural resources are the common heritage of mankind”(hereinafter CHM). Although the content of the CHM is controversial and uncertain (Khatwani, 2019), the constituent elements of the CHM are often considered to include international management (e.g., Alsdaifat, 2018; Mirzaee, 2017). Thus, the management of space resources should provide opportunities for all states to participate.

2.2 The Channels as Critical Incentive Mechanisms

As to incentives, the research on the space mining regime mainly realizes the incentive function of the regime by arranging the subjects’ rights to space resources, which can be roughly divided into ownership (e.g., Anderson, 2019; Manoli, 2016) and usufruct (e.g., Wrench, 2019; Owolabi, 2013; Buxton, 2004). Usufruct refers to the right to exploit something without owning it. However, the incentive function of rights may be limited. The rights over space resources are not equivalent to attainable benefits, as there are thresholds for exercising the rights. It is difficult for non-spacefaring states to exploit in situ space resources and exercise related rights unless spacefaring nations are willing to cooperate with them. Compared with rights, the channels directly reflect the way and difficulty of obtaining benefits, so the channel can better reflect whether incentives are adequate. Regarding benefits, space resources involve political, military, and economic benefits (Deudney, 2020), and Section 1 of Executive Order 13914 puts special emphasis on commerce, suggesting that an important motivation for actors to participate in space resource utilization is economic benefits. Due to space limitations, this paper focuses on economic benefits.

2.3 The Requirements of Commons Governance for Channels

The channels should conform to two principles related to commons governance and incentive mechanism: the common benefit principle and the proportional principle.

The common benefit principle requires “all space activities to be carried out for the benefit of all countries” (Yan, 2022), providing both legal and ethical requirements for the channel. As to legal requirements, Article I (1) of the Outer Space Treaty establishes that “the exploration and use of outer space” should be conducted for “the benefit and in the interests of all countries”. This clause sets out requirements for utilizing the global commons in space and designing related incentive mechanisms. The Outer Space Treaty has 112 States Parties, including almost all the spacefaring nations. Since States Parties to treaties are legally obliged to abide by them, the common benefit principle in the Outer Space Treaty is legally binding on many countries. The principle is even considered customary international law (Jakhu and Freeland, 2016). In terms of ethical requirements, normative institutionalism can provide references. According to this theory, institutions prescribe what is appropriate behavior (Hysing and Olsson, 2017; March and Olsen, 2004) and have a “logic of appropriateness” that influence their members’ behavior (Peters, 2019). The logic of appropriateness means that members’ action is driven by appropriate rules or exemplary behavior under institutions. The Outer Space Treaty significantly affects States Parties through the logic of appropriateness, and the common benefit principle establishes an appropriate code of conduct: the exploration and use of outer space should benefit all states. However, the benefits to countries are not unlimited, and they need to comply with the proportional principle.

The proportional principle not only helps to ensure the success of commons governance but is also closely linked to the incentive mechanism. In the domain of outer space, there should be “a balanced proportion between the users’ contribution and benefit” (Tepper, 2021). According to the principle, it can be deduced that the channels should prevent spacefaring countries from monopolizing space resources and prevent non-spacefaring countries from making large profits without input. Thus, the realization of the proportional principle can be seen as addressing the problem of monopoly and free-rider. In particular, when dealing with the free-rider issue, designers of the channels should take specific account of non-spacefaring nations’ interests, providing them with appropriate ways to participate in space resource utilization and reasonably identify their contributions. Otherwise, non-spacefaring countries may have no opportunity to contribute and attain benefits, which violates the common benefit principle. This paper argues that the participation of non-spacefaring nations in domestic or international space resource activities through natural resources, labor, capital, technologies, or other appropriate means should be recognized as contributions.

Two principles call for the creation of diversified and differentiated channels. On the one hand, diversified channels help ensure diversity and breadth of beneficiaries, thereby providing incentives for a wide range of nations. After all, one type of channel may benefit only certain countries. On the other hand, the attainable benefits of different channels should be different. Since channels are likely to differ in the way of participation and the contributions of participants, the benefits proportional to the contribution naturally vary in different channels.

3.1 Five Channels for Accessing Economic Benefits

Previous research mainly lists five types of channels for accessing economic benefits, which can be considered the basic types of channels. This paper divides these channels into two categories based on whether the channels involve exploitation or not. Three of these channels are exploitation channels, and the other two are non-exploitation channels.

3.2 Four Combinations of Channels

After identifying the basic types of channels, it is possible to summarize the combinations of the channels. In previous studies, commentators’ preferences for combining the channels are not very diverse, and the combinations can be roughly divided into four basic types. The first combination consists of only ExSA, which has been proposed by many scholars (e.g., Tennen, 2015; Hofmann and Blount, 2018). This combination provides only one channel, and only those participating in space mining programs can attain economic benefits. The second combination, including ExSA and AoF, is also popular with many scholars (e.g., Pershing, 2019; Saletta and Rossiter, 2018). The third combination is much less popular and comprises ExSA, ExRA, and AoF(e.g., Leib, 2015; Koch, 2018). The last type of combination involves ExAA (Raclin, 1985) or ToR (Paxson, 1992). This combination’s main feature is that it will grant exclusive exploitation rights, such as ownership or usufruct to space resources, to all states in advance. This mechanism is so marginal that it has been rarely mentioned in recent years.

3.3 A Brief Analysis of the Channels and the Combinations in Previous Studies

The channels and the combinations in previous research do not fully conform to the common benefit principle and the proportional principle.

Many proposals are not conducive to the realization of the common benefit principle. First, most combinations are more favorable to spacefaring countries. Most combinations involve ExSA, the most beneficial channel for spacefaring countries. In contrast, the two most beneficial channels for non-spacefaring countries, ExAA and ToR, are seldom mentioned in the literature. Besides, channels that prevent actors from occupying excess mining areas, such as ExRA and ExAA, are less likely to be included in the previous combinations, which is not conducive to preserving space resources for future exploitation by non-spacefaring nations. Third, most combinations of channels combine less than two types of channels, failing to meet the diversified requirements mentioned in Section 2.3. The limited variety of channels will reduce the types of beneficiaries. The feature of differentiation is based on the feature of diversification, so the lack of diversification makes it difficult to achieve differentiation.

Some studies do not conform to the requirement of the proportional principle. On the one hand, some studies lack reasonable restrictions on the mining area and mining time of ExSA, and spacefaring nations may take advantage of technological advantages to monopolize space resources. On the one hand, some studies containing ExSA do not reasonably restrict the size of the mining area and the length of the mining period, which could lead to a monopoly on space resources. On the other hand, some studies containing AoF do not specify the allocation criteria, allowing some countries to obtain economic benefits without making any investment. The reason for not meeting the proportional principle is mainly the lack of reasonable restrictions. This lack allows actors to get excessive benefits through channels.

4.1 The Channels and the Combination in the Building Blocks

The Building Blocks proposes two channels, ExSA and AoF, so it adopts the second type of combination listed in Section 3.2. The Building Blocks has a number of provisions related to ExSA. Article 7 on priority rights shows that the Building Blocks supports space resource utilization on a first-come-first-served basis. Paragraph e of Article 14 suggests the mining area is freely selected by the operator and then registered and notified. Article 8 affirms the legitimacy of resource rights, guaranteeing the economic benefits derived from ExSA. Article 8.1 stipulates that the resource rights for minerals and related products can be legally acquired. Article 8.2 further ensures the mutual recognition of resource rights between countries. In contrast to ExSA, AoF is only mentioned indirectly and briefly in Article 13. Paragraph g of Article 13.1 states that benefits can be shared by establishing an international fund. But Article 13.2 highlights that the benefit-sharing mechanism should not be compulsory.

4.2 The Channel and the Combination in the Artemis Accords

Based on the provisions of the Accords, it can be inferred that the Accords only involve ExSA and that the chosen combination is the first type of combination listed in Section 3.2.

At first, ExRA and ExAA are not involved in the Accords. The establishment of these two areas must be based on specific institutional arrangements, such as the reservation, division, and allocation of mining areas. The Accords, however, do not specifically mention the reservation or allocation of mining areas. Besides, Section 10(4) provides that the signatories intend to contribute to international practices and rules regarding space resource utilization based on the Accords, so the signatories believe the Accords can provide sufficient guidance and legal basis for space resource utilization. If the signatories had intended to select ExRA and ExAA, they would not have considered that the Accords had laid sufficient groundwork but would have concluded a supplementary agreement to add indispensable institutional arrangements.

In addition, the Accords does not place specific restrictions on space resource utilization, so actors have the freedom to select and exploit the mining area. Under Section 10(2), the Signatories affirm that “the extraction of space resources does not inherently constitute national appropriation under Article II of the Outer Space Treaty.” Article II of the Outer Space Treaty establishes the well-known non-appropriation principle, which stipulates that outer space is not subject to national appropriation by any means. Section 10(2) emphasizes that Article II does not prohibit space mining, ensuring the legitimacy of space resource utilization. Such interpretation helps reduce the illegal risk of ExSA. NASA intends to justify Section 10(2) through practice in the future, and it plans to purchase extracted lunar resources from providers so as to establish a precedent for extracting and purchasing lunar resources (NASA, 2020).

4.3 A Brief Analysis of the Channels and the Combinations in the Two Instruments

Based on Section 4.1 and Section 4.2, neither instrument contains diversified and differentiated channels. The Accords adopts the first type of combination in Section 3.2, and the Building Blocks uses the second type of combination in Section 3.2. While the two instruments reflect a willingness to adhere to the common benefit principle and the proportional principle, they do not focus on the design of the channels, and the channels do not adequately meet the requirements of both principles.

The channels in both documents are not conducive to realizing the common benefit principle. While Article 1.1 of the Building Blocks and preface of the Accords reflect the spirit of the common benefit principle, like many proposals mentioned in Section 2, these two instruments do not pay sufficient attention to how to design diversified channels. The Building Blocks contains two channels, and the Accords includes only one. As analyzed in Section 2.3 and Section 3.3, the lack of diversity is not conducive to realizing the common benefit principle.

According to both instruments, their arrangement of ExSA will not violate the proportional principle, but more detailed provisions are needed to prevent monopoly. Article 7 of the Building Blocks implies that there are maximum limits on the mining area and the mining period. Although the Accords do not mention the limit in these two aspects, Section 10(2) and Section 10(3) commit to compliance with the Outer Space Treaty, demonstrating the willingness of signatories to abide by the non-appropriation principle. The above provisions show that both instruments oppose the monopoly on space resources. Nevertheless, specific provisions are needed. If there is no clear limit on the period and area of exploitation, some nations may occupy a large number of space resources for a long time, forming a de facto monopoly.

5.1 Selection of the Channels

According to Section 3.1, the previous research mainly referred to five channels. Based on the common benefit principle and the proportional principle, this section analyzes whether these five channels should be selected and how they should be specially arranged.

To realize the proportional principle, channels should ensure that the economic benefits received by actors are proportional to their contributions. As analyzed in Section 2.3, the key to adhering to this principle is to deal with two problems: monopoly and free-rider. To prevent monopoly, it is necessary to arrange ExSA rationally. Section 3.1.1 shows that this channel is based on a first-come, first-served basis, which risks leading to a monopoly on space resources. Nonetheless, this channel should be included because many spacefaring nations favor it. Without this channel, it would be difficult to obtain spacefaring nations’ support. Therefore, the regime should not exclude this channel but adopt reasonable arrangements to prevent monopoly. On the one hand, reasonable restrictions should be imposed on the time and area of ExSA. On the other hand, the regime needs to contain channels with the function of preventing monopoly, such as ExRA.

As to the free-rider problem, it is necessary to prevent non-spacefaring countries from using some channels to obtain disproportional benefits without any contribution. First, if ExRA is contained, it should not only ensure that non-spacefaring countries have opportunities to utilize space resources in the future but also prevents a situation where these countries only occupy the area but do not utilize it. Thus, it is necessary to reasonably arrange the prerequisites for application and the latest time to start actual utilization. According to the “use it or lose it” policy applied in countries such as the United States, Canada, Australia, and Zimbabwe, miners should extract the resource or risk losing mineral rights (Gwata, 2019). Second, ExAA should be excluded. This channel cannot coexist with ExSA. The allocation of a fixed share of mining area to each country is contrary to the practice of allowing each country to select an unlimited share of the mining area. More importantly, the channel enables non-spacefaring countries to gain access to benefits without any contribution, violating the proportional principle. According to Locke, it is labor that gives a right of property (Locke, 1689). Third, regarding AoF, there is a need to rationalize the conditions under which funds are allocated and the amount of allocated funds, ensuring that beneficiaries have made contributions within their capacity and that the benefits are proportional to their contributions. Fourth, the institutional arrangements for ToR should prevent non-spacefaring countries from acquiring transferable rights without investing in space resource utilization by setting conditions for the acquisition and ToR. Fifth, participants in space resource activities contribute more than those that do not, so the available benefits of non-exploitation channels should be smaller than those of exploitation channels, which can encourage actors to make greater contributions.

To ensure that the channel is in line with the common benefit principle, the commons governance regime should contain different types of channels to ensure that it can benefit countries at different levels of development. According to the previous analysis, ExAA should be excluded. The combination of other channels is beneficial to diverse nations. Based on Section 3.1, ExSA is most beneficial to spacefaring nations, and the other three channels, ExRA, AoF, and ToR, are conducive to non-spacefaring countries to obtain economic benefits. Besides, space cooperation between spacefaring nations and non-spacefaring countries needs to be encouraged, so the channels should provide more economic incentives for such collaboration.

It is worth adding that the channels may not be limited to the above listed in this paper. To improve the alignment of the channels with the two principles, commentators may envision new channels. This article proposes a new channel, which is described in detail in Section 5.2.4.

5.2 Combinations of the Channels

After the channels are selected, it is necessary to consider how they can be reasonably integrated. This section first introduces the institutional arrangements required for the channels. Then, it separately expounds on the specific arrangements for each channel, including how they meet the requirements of the two principles and how they relate to each other.

Some involved details related to the channels, such as the size of the area, the duration of time, the participation criteria, and the amount of funding, can be adjusted in the future in light of the actual situation and technical level.