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In spaceborne synthetic aperture radar (SAR), a single-polarization on-transmit offers twice the swath width compared to full polarization. This is linked to SAR system design issues, and, without getting into the technical details deserving by themselves a full paper, we can just mention the swath characteristics of ALOS PALSAR (the Advanced Land Observing Satellite, Phased Array L-Band Synthetic Aperture Radar), reducing from 70 km for the dual-pol mode to 30 km for the full polarization mode. The reduced coverage in the full polarization mode has a harmful impact on the revisit time, which is always a major drive for the Earth-observing community. The options chosen up to now for dual-pol system designs (or single-polarization on-transmit) rely on a linear polarization on-transmit [either horizontal (H) or vertical (V)], with two orthogonal polarizations on-receive. Souyris and Raney in earlier papers proposed more pertinent alternatives for the selection of the transmit polarization leading to a better characterization of the scattering mechanisms. In this paper, the analysis is pursued in more depth by including the effect of the ionosphere on the wave propagation and extending the applications to polarimetric interferometry SAR (PolInSAR). A compact mode is developed where the transmit polarization is circular, whereas the only constraint on the two receiving polarizations is independence. Indeed, the choice of the polarizations of the two receive channels does not matter, as any polarization on-receive can be synthesized from these two measurements. This is, however, not the case for the unique transmit polarization. At a low frequency, where the ionosphere has a significant effect, the circular transmit polarization is the only sensible option, as it provides an effective constant polarization as seen by the scattering surface. This is an essential condition for a meaningful multitemporal analysis. Both the polarimetric SAR applications and the PolInSAR appl- - ications in the context of this compact polarimetry (CP) mode are explored. A pseudocovariance matrix can be reconstructed following Souyris' proposed approach for distributed targets and is shown to be very similar to the full polarimetric (FP) covariance matrix. The reconstruction of the cross-polarized Sigma0 is shown to be reliable and to have very low sensitivity to Faraday rotation. A PolInSAR vegetation height inversion for P-band is presented and applied to the CP data with a level of performance that is similar to the one derived from FP (a 1.2-m root-mean-square height error on the ONERA Airborne radar (RAMSES) data over the Landes Forest). A procedure is developed to correct for the ionospheric effects for the PolInSAR acquisition in the FP or CP mode and is assessed on the data simulated from an airborne acquisition. The results demonstrate that the technique is efficient and robust. The calibration of CP data is identified as an important challenge to be solved, and some clues are provided to address the problem.