Targeted taxes and tax incentives are some options policymakers have to promote sustainable and responsible growth of the emerging space industry. Revenues generated could support climate action and global development priorities back on Earth. Here are some examples of taxes and tax incentives that could be used:
Space activities like tourism and mining have potential environmental impacts through rocket launches emitting black carbon into the stratosphere. This can contribute to climate change and ozone layer damage. Targeted taxes on commercial space flights could help offset these impacts and fund climate mitigation efforts.
Broader environmental taxes on space industry activities, modeled after aviation fuel taxes, could incentivize the development of cleaner fuels and greener technologies for launch vehicles and spacecraft. The revenues generated could support sustainability initiatives.
Tax incentives can also encourage private sector investment into downstream space industries developing innovative but sustainable technologies in areas like robotics, microgravity research, and satellite services. These high-tech sectors drive economic growth.
As space commercialization accelerates, policymakers may consider universal tax regimes where countries pay into a central fund based on GDP or voluntary contributions. The goal would be to share space benefits equitably under the “province of all mankind” principle in the Outer Space Treaty.
Overall, considerations around cooperation, agile rulemaking, and equitable benefit sharing will be important for effectively governing outer space activities as well in a sustainable manner.
