Bonds improve post mission disposal compliance and the sustainability of low Earth orbit

Post-mission disposal (PMD) non-compliance threatens the long-term sustainability of Low Earth Orbit (LEO). Between 2010 and 2024, only 40% of satellites in non-naturally compliant orbits successfully deorbited. As launch rates and large constellations expand the active population, reducing satellite derelicts is increasingly urgent. We evaluate an escrow-based PMD performance bond that makes non-compliance financially costly while preserving access to orbit. The analysis couples an economic model of operator decision-making with a model of LEO population evolution, allowing launches and debris risk to co-evolve over 25 years. Bonds of $200,000 per satellite reduce derelict satellite mass per year by more than one-third and increase welfare by up to 27%, while bonds above $1 million show diminishing marginal returns. Even partial adoption can be effective: a bond covering 20% of the global market still improves sustainability under all levels of market leakage, although broader participation delivers greater environmental and economic benefits.