This report provides the Federal Aviation Administration with an analysis of the potential impacts of implementing a regulatory regime on the emerging commercial spaceflight market. The authors examined the impact of a regulatory regime on the need to balance public safety and market growth. Their analysis shows that well-crafted safety and health regulations are effective and are generally associated with increased innovation and market growth.

Considerations for Regulating the Commercial Human Spaceflight Market

Lessons for Balancing Market Growth and Public Safety

Douglas C. Ligor, Tom LaTourrette, Benjamin M. Miller, Mack Rodgers, Sarah Rodden, Ryan J. Bain

ResearchPublished Dec 17, 2025

The development of commercial space activities is rapidly expanding, and there are estimates that the global space economy will grow to more than $750 billion by 2028. Space activities were previously limited to state-sponsored or government-controlled operations. However, numerous private entities are now conducting space activities, including the orbital and suborbital space travel of civilian passengers. This report provides the Federal Aviation Administration’s (FAA’s) Office of Commercial Space Transportation with an analysis of the potential impacts of implementing a regulatory regime on the emerging commercial spaceflight market.

The authors examined the theoretical bases that underlie the relationship between the government’s application of a regulatory regime and the need to balance two fundamental goals of governance: public safety and market growth. To better understand how this balance has been achieved in other markets, the authors used case studies of analogous regulatory regimes to explore how particular types of regulations may achieve both goals. Their analysis shows that safety and health regulations that are technology-forcing and time-phased are effective and generally associated with increased innovation and market growth. This report will help inform decisionmaking by leaders and managers within the FAA, other government agencies, and private sector entities as the use of space as a resource continues to expand.

Key Findings

  • The role of government regulatory agencies is to balance the autonomy of commercial private firms against those firms’ societal obligations to serve the public good and not harm individuals. Given the unequal bargaining power and information dynamic between an individual and a spaceflight company, the FAA may consider serving as an advocate to the extent that it mitigates or resolves the power differential.
  • Government agencies should assess the trade-offs between the disorder of a marketplace dominated by commercial firms and the dictatorship imposed by excessive centralization of control of the activities at hand.
  • Safety and health regulations are effective when properly crafted and social regulations generally correlate with increased innovation in the marketplace.
  • Although at face value, lead and asbestos regulation impeded industry growth, at a broader level, those regulations led to substantial innovation to develop substitute technologies that stimulated growth. In this respect, the regulations succeeded in balancing industry growth and public safety.
  • In the automotive industry, the government imposed time-phased, technology-forcing performance requirements that balanced industry growth and public safety. In doing so, the government also achieved a balance that provided sufficient advocacy for individuals while minimizing disruptive litigation.
  • In the nuclear power industry, the government protected public safety by imposing technology-forcing standards and, at the same time, supported the nascent commercial industry with financial incentives and liability protections. As a result, even when major accidents occurred, public confidence remained stalwart such that the industry continued to grow.

Topics

Document Details

Citation

Chicago Manual of Style

Ligor, Douglas C., Tom LaTourrette, Benjamin M. Miller, Mack Rodgers, Sarah Rodden, and Ryan J. Bain, Considerations for Regulating the Commercial Human Spaceflight Market: Lessons for Balancing Market Growth and Public Safety. Santa Monica, CA: RAND Corporation, 2025. https://www.rand.org/pubs/research_reports/RRA4317-1.html.
BibTeX RIS

Research conducted by

This research was sponsored by the FAA and conducted within the Acquisition and Technology Policy Program of the RAND National Security Research Division.

This publication is part of the RAND research report series. Research reports present research findings and objective analysis that address the challenges facing the public and private sectors. All RAND research reports undergo rigorous peer review to ensure high standards for research quality and objectivity.

This document and trademark(s) contained herein are protected by law. This representation of RAND intellectual property is provided for noncommercial use only. Unauthorized posting of this publication online is prohibited; linking directly to this product page is encouraged. Permission is required from RAND to reproduce, or reuse in another form, any of its research documents for commercial purposes. For information on reprint and reuse permissions, please visit www.rand.org/pubs/permissions.

RAND is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.