The cost of space

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The cost of space

Space Cost

The research on the space cost focused on how to determine the annualised cost of keeping the HE on- residential estate fit for purpose and in good condition on a steady-state basis. It looked at what needs to be spent, rather than at actual expenditure incurred and shown in the accounts. This is an important distinction from the Transparent Approach to Costing (TRAC) method.Space Cost
Two different measures of the financial provision for HEIs’ non-residential estate are used in the analysis, namely the sustainable estate provision and the total estate provision for the estate. The sustainable estate provision represents the level of expenditure per square metre required to maintain indefinitely the nonresidential estate in a good and fit-for-purpose condition. It includes the following cost components:
a. Operating costs, such as energy, water and cleaning.
b. Maintenance costs necessary to keep buildings in good condition.
c. Depreciation costs – including the cost of periodic refits and replacing buildings at the end of their lives.
The total estate provision for the estate comprises the sustainable estate provision plus the opportunity cost of the capital tied up in buildings and the land beneath them. As such, it recognises the opportunity costs of occupying buildings. The total estate provision measure takes account of all explicit and implicit costs of using space and is an approximation of the rent that would be charged by a landlord. It provides useful information for determining the appropriate level of a fully cost-reflective space charge.
Both of these measures were evaluated for HEIs across the UK using Estate Management Statistics (EMS) data for 2002-03 as contained in the EMS ‘Annual report 2004’ (HEFCE 2004/45). While HEIs’ operating costs were taken directly from records of their expenditure, several assumptions were necessary to generate estimates of the other costs. The SMP’s ‘The cost of space’ report explains the basis of these assumptions.
The conclusions were that the average sustainable estate provision across the HE sector is £147.40 per m2 of the net non-residential area. This is the total of the following components:
Operating cost: £43.80/m2
Maintenance cost: £53.40/m2
Depreciation cost: £50.20/m2
The average total estate provision is £192.50 per m2. This figure is obtained by adding an opportunity cost of capital of £45.10 per m2 to the sustainable estate provision. Both the sustainable estate provision and the total estate provision were found to be higher than the median reported flat rate space charges actually operated by HEIs, as reported in the space management practice survey from the ‘Review of Practice’. The interactive SMG model uses this approach to calculating costs. The model has updated annually following the publication of new EMS and Higher Education Statistics agency data. Clarifies the differences between the cost component of the SMG’s model of the affordable estate and the TRAC methodology.
There are five arguments that are advanced in any discussion about the utility of space exploration and the roles of humans and robots. Those arguments, in roughly ascending order of advocate support, are the following:
1. Space exploration will eventually allow us to establish a human civilisation on another world (e.g., Mars) as a hedge against the type of catastrophe that wiped out the dinosaurs.
2. We explore space and create important new technologies to advance our economy. It is true that for every dollar, we spend on the space program, the U.S. economy receives about $8 of economic benefit. Space exploration can also serve as a stimulus for children to enter the fields of science and engineering.
3. Space exploration in an international context offers a peaceful cooperative venue that is a valuable alternative to nation-state hostilities. One can look at the International Space Station and marvel that the former Soviet Union and the U.S. are now active partners. International cooperation is also a way to reduce costs.
4. National prestige requires that the U.S. continue to be a leader in space, and that includes human exploration. History tells us that great civilisations dare not abandon exploration.
5. Exploration of space will provide humanity with an answer to the most fundamental questions: Are we alone? Are there other forms of life besides those on Earth?
It is these last two arguments that are the most compelling to me. It is challenging to make the case that humans are necessary to the type of scientific exploration that may bring evidence of life on another world. There are strong arguments on both sides.
Personally, I think humans will be better at unstructured environment exploration than any existing robot for a very long time. There are those who say that exploration with humans is simply too expensive for the return we receive. However, I cannot imagine any U.S. President announcing that we are abandoning space exploration with humans and leaving it to the Chinese, Russians, and Indians, Japanese or any other group. I can imagine the U.S. engaging in much more expensive international cooperation. The manned space exploration program is absolutely worth the cost. But first, consider the following because understanding the following points is crucial to understanding what manned space exploration affords us in so many areas:
1. The money spent on manned space exploration is spent right here on Earth and most of it is spent in the US. We do not yet have a Bank of the Milky Way, the First International Bank of Mars, or a Lunar Mutual Savings and Loan. The money that is spent goes to manufacturing, research and development, salaries, benefits, insurance companies, doctors, teachers, scientists, students, blue- and white-collar workers, and corporations and businesses both large and small. The money disperses throughout the economy in the same way as money spent on medical research, building houses, or any other activity we engage in with government or even private spending.
2. Whenever we look at government spending (or any spending for that matter), it is important that we understand what is being purchased and whether there is a value for that investment. We should also ask if the value benefits a narrow group of people or a special interest, or does it have the potential to benefit large groups, even humanity. Clearly, several types of public expenditures can be considered investments and they can benefit large groups of people and humanity. So I also look for qualitative factors, such as the ability to inspire others to do hard work, to go the next step, to push the envelope for the next level of advancements for all our benefit. I also look to see if the public expenditure can change lives for the better and, if so, over what period of time. There are several types of public expenditures that can do some of this, but manned space exploration is able to do it all.
3. The space age is 50 years old if we calculate using the launch of Sputnik as the beginning point. The manned flight began with Soviet cosmonaut Yuri Gagarin on April 12, 1961, thus manned spaceflight is almost 47 years old. A good portion of our space technology, development, and know-how was developed here on Earth when the two space powers of the time, the USSR and the US, were making treaties to work together in space, prohibit weapons in space, to rescue each other’s astronauts/cosmonauts if necessary, and to treat celestial bodies in a way that prevented territorial ownership while allowing room for resource development for all mankind. Mankind worked together to prevent conflict in space and these efforts now have a proven and unparallel track record. Today, we have an International Space Station (ISS) with multiple countries working together for its completion, support, science, and management. The ISS Station Agreement is a model agreement that works and the two former Cold War enemies are working together to be the best we humans can be. This has always been the case with manned space exploration, as well as with all of the space exploration. Did we have competition? Yes. Do we have conflict and tension? No other discipline, activity, venture or multinational effort has a track record equal to manned space development. While there may be challenges ahead for our space behaviour, so far we are doing fine in space, certainly much better with each other than we are doing back here on Earth.
This is all fine, but how does this translate to manned space exploration being worth the cost of millions of taxpayers when there are other competing and important priorities for a finite amount of taxpayer money? Of course, we say that the entire NASA budget is less than 1% of the entire US budget, but I have found that saying that does not resonate with most people. Still, according to the GPO budget information, the US 2007 budget was about $2.784 trillion and NASA got a little more than $ 16 billion. This means all of NASA’s spending is marginally more than half of 1% of the total US budget. In contrast, social programs receive about 98 times the amount of money spent on NASA. Another way of looking at this would be to understand that a 1% reduction in government social expenditures could just about double the NASA budget for any given year.
When I started this piece, I said I hear this question a lot. So a few years ago, I decided to see what really happened to a public dollar spent on a good space program in comparison to spending that dollar on an entitlement program as well as a revenue-generating infrastructure program. I used the school breakfast program for the entitlement program. I chose Hoover Dam for the revenue generating infrastructure program. The space program I chose was the manned program to the Moon consisting of the Mercury, Gemini, and Apollo programs. Let me briefly summarise what I discovered.
All of these programs or other similar programs, if properly managed, can produce benefits in excess to the originally invested dollar. There is no guarantee that a program will be properly managed and this includes a space program. Properly managed implies many things, but I don’t think space is any more or less likely to be well managed than anything else the government does. Not all of our space programs made the short list, as I looked at several public space programs for this study before deciding that our Moon program was the best. A mismanaged space program wastes money, talent, and time just like other programs the government does.
What happened to the dollar invested in each of the respective programs? The school breakfast program was successful, increasing the number of kids getting breakfast. However, when funding for this program or this type of program stops, as soon as the last of the funds goes through the pipeline, the program is over. It has no life past government funding. There was no residual benefit lasting years after the demise of the program. I was unable to find an inspirational or motivational quality for the program leading to downstream business, economics, science, or other advancement and development. One could make the case that kids who benefited from the program went on through school to accomplish great things and I don’t doubt that. I simply could not document it in my research.