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  • Anastasia Gorencova

Sustainable Opportunities for Cyprus From Space

Sustainability and eco-innovation in Cyprus

Due to the lack of comprehensive and coherent environmental policy, eco-innovation level in Cyprus are fairly low. Amidst the country's EU obligations, Cyprus authorities continue prioritising non-environmentally friendly projects.

One of the main issues in Cyprus is high energy consumption, caused by poor public transportation infrastructure and the overuse of private cars. Air pollution caused by tourism, deforestation and fire hazards is amongst other serious problems. Based on the analysis of long term meteorological datasets (from 1901 to 2006), the Easter Mediterranean and the Middle East (EMME) area is predicted to face a relatively strong warming of about 1-3degC in the near future (2010-2039), to 3-5degC in the mid-century period (2040-2069) and 3.5-7degC by the end of century (2077-2099). With these trends, Cyprus requires to implement immediate changes to reduce its CO2 emission levels and improve its sustainability performance. Alongside the introduction of comprehensive environmental policies, the development of a high-tech industry can also significantly improve sustainability and eco-innovative performance in Cyprus. This report will focus on the actions that can be undertaken by the state for the development of the space industry in the Cypriot economy and the likely effects of it on sustainability.


Current trends in the Space Industry

A study by the Bank of America Merrill Lynch derived an optimistic estimate of the space industry, seeing the market grow to $2.7 trillion by 2045, while the separate study by Morgan Stanley projected a more conservative outcome of $1.1 trillion economy in 2040. While it is difficult to predict the actual figures, one thing is certain - the industry is expanding at a tremendous rate. This significant growth will require the development of new markets, creating a lot of opportunities for new entrants like Cyprus. Achieving a trillion-dollar space economy by 2040 will require fundamental changes for the industry. One of the main drivers of future growth is said to be the developments and applications of the downstream segment of space. There is a lot of potential for growth for the companies that incorporate and employ data and knowledge that are derived from space for Earth-related objectives as well as the products and services that support them. Due to the relatively low capital requirements, lower levels of risk and higher feasibility, this text focusses on the analysis of the EO satellite data alongside current technological advancements and its application to the improvement of the sustainability-related performance of Cyprus.


How EO satellite data and AI can support sustainability

Many of the quantitative indicators that are used by the United Nations regarding environmental and climate change are derived largely or even exclusively from Earth Observation (EO) satellites. This data offers many ways of improving the implementation of multilateral environmental agreements. Satellite data coupled with new technologies such as artificial intelligence can bring benefits to science, business, the economy and society at large. Artificial intelligence and computing can help to unlock the full potential of these satellite data and make full use of missions in orbit. Applying artificial intelligence to Earth Observation data is expected to provide users with the timely insights they need. This is particular relevant for disaster response and environmental challenges.

The assessment of the cost-effectiveness of any policy measures will also be reliant on the information collected by EO satellites. Without this kind of insight, there will be insufficient evidence with which to inform the decision-makers on environmental policies.

Development and implementation of AI techniques in the republic can contribute tom much better utilisation of the data generated by the EC's Copernicus Programme, which is free to access. Increasing availability and quality of the analysis of data collected from space can improve overall awareness of current and forecasted sustainability-related issues, alongside the uses of space technology as a way of mitigating them. This can further stimulate the development of the space industry and improve the eco-innovative performance of the Cypriot economy.


How the Cypriot government can help develop the space industry

While it is difficult to predict what market might emerge to drive the growth of the overall space economy, government support is certainly required to stimulate this development, as the public sector is playing a key role in the growth of entrepreneurial space companies. Take SpaceX as a prime example of how early government investment contributed to the success of a company.


Government Funding of R&D

Cyprus has very low research and development expenditure (% of GDP) - 0.46 compared with 2.05 EU average. Therefore, the introduction fo policies that focus on the use of public investment to stimulate the creation of space startups is one way the Cypriot government can help nurture the industry. Increase in public spending in R&D will not only benefit the economy by increasing its production capacity, making Cyprus more attractive for private domestic and foreign investment, but also by diversifying the economy that is currently highly reliant on tourism. However, as a relatively small country, Cyprus is likely to struggle with providing space companies with sufficient funds, making the development of a space industry within the republic more challenging.


Becoming a full ESA Member State

Another way the government can stimulate the growth in its space sector is through becoming a member of the European Space Agency (ESA). Cyprus has already signed the cooperation and European Cooperating State (ECS) agreement in 2009 and 2016, respectively. While currently Cyprus is an ECS and is benefitting from the Plan for European Cooperating States (PECS) opportunities that fund research and development activities aimed at improving the nations' space industry capacity, the full ESA membership will provide Cypriot companies with access to a wide range of gains from the full participation in the ESA programmes. Cooperation with ESA is a significant opportunity for a future Cypriot space sector, created by the funding returns and support provided by the agency. Even though becoming a member will require significant financial contributions from the republic, it is still likely to be more efficient than solely relying on government spending on national space projects and programmes.

SnapPlanet - a company that brings EU data to the mass market via a social network is a good example of how ESA helps startups by providing financial and non-financial support.


Development of legal frameworks

Even though Cyprus is using tax incentives for purposes of R&D, there is limited or no information at all concerning their targeting and implementation. Another issues is that the international space law does not offer a direct and acute detailing of the policies of activities in space, therefore a domestic legal framework is required. The legal framework that addresses questions of insurance and liability, the procedure for the adoption and implementation of space programmes, intellectual property rights protection alongside formally incorporated objectives of the country's space policy should increase transparency and attract more investment in the industry. An example of how this kind of measure can be implemented is Luxembourg, which established an efficient legal and regulatory framework with dedicated space law that ensures stability and guarantees a high level of protection for investors, explorers and miners, allowing the country to attract significant foreign investment.


Conclusions

The global space industry is expected to grow tremendously within the next 20-25 years which will require the development of new markets, creating a lot of opportunities for Cyprus. While the republic already has some large global space sector players, like Cyta, the government needs to foster investment and an entrepreneurial space ecosystem within the country to further develop the industry. The most feasible measure for the government would be developing a comprehensive legal framework to encourage investment and increasing the overall awareness of the opportunities created by the growth in the global space industry. Becoming a full member of ESA can also provide Cyprus with significant opportunities for the development of the space industry by gaining access to financial and non-financial support.

Growth of Cyprus' space industry is likely to improve sustainability through the application of AI to the analysis of the data collected by EO satellites that can be used in the formulation of the authoritative scientific advice, development of relevant policies and assessment of their cost-effectiveness. In addition to that, making the EO data more accessible for the general public will increase overall awareness of the sustainability-related issues that might also lead to an improvement in the eco-innovative performance in the future. Overall, the development of the space industry in Cyprus will not only help differentiate the economy and increase its productive capacity but also contribute to the improved sustainable performance through the reduction of CO2 emissions stimulated by the implementation fo comprehensive polices.




To obtain a copy of the full report please send a request to info@greyspace.com.cy

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