Friday, March 7, 2014

Projected Climate Change and Impacts in the Western US: Pielke Jr. v. Podesta

In light of recent events, it seems appropriate for me to provide the following, which is an answer I gave on my preliminary exam...



A) What are the most robust findings for how climate might change in the future in the western US according to the IPCC?  Discuss sources of uncertainty in determining climate change and associated impacts that are relevant to water resources;

Projected Climate Change and Impacts in the Western US

The Western United States is an arid region (Woodhouse, 2010) (Frisvold in Colby, 2011), receiving insufficient precipitation to raise crops without irrigation on the vast majority of the land. Furthermore, its climate is historically highly variable across space and time (Seager, 2009) (MacDonald, 2005). The region does have significant groundwater resources, however they have been strained over the past century and the resource is becoming more expensive and environmentally damaging to access (Ashley, 1999) (Schlager et al., 2006). Finally, ecosystem primary productivity in the Western US is dominated by forests, which has implications for a changing climate especially related to fire and runoff patterns (Schwinning, 2008) (Williams, 2010).

The most robust findings for how climate might change in the future in the western US according to the IPCC are largely in line with the present climate regime: climate is projected to remain highly seasonal (i.e. wet, cold winters and hot, dry summers), but with higher temperatures and less streamflow (IPCC, 2007) (IPCC, 2013). The table below summarizes the impacts over Western North America (roughly everything West of Utah) or North America (US and Canada), unless otherwise indicated.

Table 1. Climate change and its impacts (except sea-level rise) on the Western US, taken from IPCC (2007, 2013).


Forcing
Experienced or Anticipated Changes
Experienced or Anticipated Impacts
Uncertainties
Temperature
By 2046–2065, warming in all regions exceeds the natural variability estimate for all models. Thus it is very likely the warming signal will be large compared to natural variability in all NA regions throughout the year by mid-century.  (IPCC, 2013:14-41) For most combinations of model, scenario, season and region, warming in the 2010 to 2039 time slice will be in the range of 1 to 3oC. (IPCC, 2007:626) Late in the century, projected annual warming is likely to be 2 to 3°C across the western, southern, and eastern continental edges, but more than 5oC at high latitudes (Christensen et al., 2007: Section 11.5.3.1). The projected warming is greatest in winter at high latitudes and greatest in the summer in the south- west U.S. (IPCC, 2007:627)
Projected warming in the western mountains by the mid-21st century is very likely to cause large decreases in snowpack, earlier snow melt, more winter rain events, increased peak winter flows and flooding, and reduced summer flows (IPCC, 2007:62). Warming is very likely to place additional stress on groundwater availability, compounding the effects of higher demand from economic development and population growth (medium confidence) (IPCC, 2007:55)
There is generally less confidence in projections of precipitation than of temperature (IPCC, 2013:14-38)
Evapo-Transpiration
A robust evaporation increase characteristic of mid-latitude continental warming (Seager et al., 2007; Seager and Vecchi, 2010) … the CMIP5 models still show a strong decrease in soil moisture here (Dai, 2013), due to increasing evaporation. (IPCC, 2013:14-42)
Rising temperatures will diminish snowpack and increase evaporation, affecting seasonal availability of water. (IPCC, 2007:55)


Precipitation
The fraction of annual precipitation falling as rain (rather than snow) increased at 74% of the weather stations studied in the western mountains of the U.S. from 1949 to 2004 (Knowles et al., 2006). (IPCC, 2007:622)


Winter precipitation increases extend southward into the USA (northern portions of SREX regions 3–5; Neelin et al., 2013) but with decreasing strength relative to natural variability. (IPCC, 2013:14-42)
This behaviour is qualitatively reproduced in higher resolution simulations (Figure 14.18). (IPCC, 2013:14-41)
When downscaled, CMIP3 models showed less drying in the region (Gao et al., 2012c) and an extreme precipitation increase (IPCC, 2013:14-42) CMIP5 models do not consistently show such a precipitation decrease in this region (Neelin et al., 2013). This is one of the few emerging differences between the two ensembles in climate projections over NA. (IPCC, 2013:14:42)
Streamflow
Streamflow over the last century has decreased by about 2%/decade in the central Rocky Mountain region (Rood et al., 2005). IPCC, 2007:621)
Climate change will constrain North America’s over-allocated water resources, increasing competition among agricultural, municipal, industrial and ecological uses (very high confidence). (IPCC, 2007:55) Major challenges are projected for crops that are near the warm end of their suitable range or which depend on highly utilised water resources. (IPCC, 2007:15)


Drought
An increase in drought frequency (Sheffield and Wood, 2008; Gutzler and Robbins, 2011) (IPCC, 2013:14-42)
Climate change will constrain North America’s over-allocated water resources, increasing competition among agricultural, municipal, industrial and ecological uses (very high confidence). (IPCC, 2007:55)


Snowpack
Spring and summer snow cover has decreased in the U.S. west (Groisman et al., 2004). April 1 snow water equivalent (SWE) has declined 15 to 30% since 1950 in the western mountains of North America, particularly at lower elevations and primarily due to warming rather than changes in precipitation (Figure 14.1a) (see Mote et al., 2003; Mote et al., 2005; Lemke et al., 2007: Section 4.2.2.2.1). (IPCC, 2007622)


Warming, and changes in the form, timing and amount of precipitation, will very likely lead to earlier melting and significant reductions in snowpack in the western mountains by the middle of the 21st century (high confidence) (Loukas et al., 2002; Leung and Qian, 2003; Miller et al., 2003; Mote et al., 2003; Hayhoe et al., 2004). (IPCC, 2007:627)


Snowmelt
Streamflow peaks in the snowmelt dominated western mountains of the U.S. occurred 1 to 4 weeks earlier in 2002 than in 1948 (Stewart et al., 2005).  (IPCC, 2007:622)
In projections for mountain snowmelt-dominated watersheds, snowmelt runoff advances, winter and early spring flows increase (raising flooding potential), and summer flows decrease substantially (Kim et al., 2002; Loukas et al., 2002; Snyder et al., 2002; Leung and Qian, 2003; Miller et al., 2003; Mote et al., 2003; Christensen et al., 2004; Merritt et al., 2005).
(IPCC, 2007:627)


Extreme Heat
Warming generally leads to a 2- to 4-fold increase in simulated heat wave frequency over the 21st century (e.g., Lau and Nath, 2012). (14-41)  Warm extremes across North America are projected to become both more frequent and longer (Christensen et al., 2007: Section 11.5.3.3). (IPCC, 2007:627)
Cities that currently experience heatwaves are expected to be further challenged by an increased number, intensity and duration of heatwaves during the course of the century, with potential for adverse health impacts. (IPCC, 2007:15)


Wildfire
Warmer summer temperatures are expected to extend the annual window of high fire ignition risk by 10-30% (IPCC, 2007:619)
Disturbances such as wildfire and insect outbreaks are increasing and are likely to intensify in a warmer future with drier soils and longer growing seasons (very high confidence) (IPCC, 2007:619)


ENSO
It is very likely that ENSO will remain the dominant mode of interannual variability with global influences in the 21st century, and due to changes in moisture availability ENSO-induced rainfall variability on regional scales will intensify. (IPCC, 2013:14-23)
There is medium confidence that ENSO-induced teleconnection patterns will shift eastward over the North Pacific and North America. There is low confidence in changes in the intensity and spatial pattern of El Niño in a warmer climate. (IPCC, 2013:14-23)
ENSO shows considerable inter-decadal modulations in amplitude and spatial pattern within the instrumental record. Models without changes in external forcing display similar modulations, and there is little consensus on whether the observed changes in ENSO are due to external forcing or natural variability (IPCC, 2013:14-23)

Sources of Uncertainty in Climate Change Predictions

Data Collection Uncertainties

The IPCC (2013) identifies uncertainties related to the raw observational data itself:

Measurements have changed in nature as demands on the data, observing practices and technologies have evolved. These changes almost always alter the characteristics of observational records, changing their mean, their variability or both, such that it is necessary to process the raw measurements before they can be considered useful for assessing the true climate evolution… the vast majority of the raw observations used to monitor the state of the climate contain residual non-climatic influences. Removal of these influences cannot be done definitively and neither can the uncertainties be unambiguously assessed. Therefore, care is required in interpreting both data products and their stated uncertainty estimates (2-8).

The approaches taken to reduce this uncertainty are, “redundancy in efforts to create products; dataset heritage; and cross-comparisons of variables that would be expected to co-vary for physical reasons, such as land surface temperatures and sea surface temperatures around coastlines” (2-9). As a general matter, removing noise to identify signal is standard practice in data analysis. Of all the complicating factors, this would seem the least difficult to address. That said, what error there is will hopefully be non-systemic and small; errors into these data would have significant effects on the outcomes of parameterization efforts. Page 9-61 also notes that “In some cases, insufficient length or quality of observational data makes model evaluation challenging, and is a frequent problem in the evaluation of simulated variability or trends.”

Data Handling Uncertainties

The IPCC (2013) does not address this in great detail, but it does discuss “dataset heritage” (above), as well as make this point:

The uncertainty in observational records encompasses instrumental / recording errors, effects of representation (e.g., exposure, observing frequency or timing), as well as effects due to physical changes in the instrumentation (such as station relocations or new satellites). All further processing steps (transmission, storage, gridding, interpolating, averaging) also have their own particular uncertainties. Since there is no unique, unambiguous, way to identify and account for non-climatic artefacts in the vast majority of records, there must be a degree of uncertainty as to how the climate system has changed (2-8).

Given that, we should clearly be aware of how data has been treated before it is used in modeling or generating historical trends. This should help prevent “error propagation” (9-60).

Data Processing Uncertainties

According to the IPCC (2013), “Some model errors can be traced to uncertainty in representation of processes (parameterisations). Some of these are long-standing issues in climate modelling, reflecting our limited, though gradually increasing, understanding of very complex processes and the inherent challenges in mathematically representing them” (9-60). That said, they do have increased confidence in the newer Atmosphere Ocean Global Climate Models (IPCC, 2013:9-3). However, models might miss key thresholds and generalize across vast areas (IPCC 2013). Furthermore, “Future anthropogenic emissions of greenhouse gases, aerosol particles and other forcing agents such as land use change are dependent on socio-economic factors including global geopolitical agreements to control those emissions,” (12-10) meaning there are uncertainties in human side.

Other issues are that “Regional climate projections are generally more uncertain than projections of global mean temperature” (14-38) and bio-topography may override the climate signal (“sensitivity to resolution” (9-60)). In addition, clouds are not well understood: The simulation of clouds in climate models remains challenging. There is very high confidence that uncertainties in cloud processes explain much of the spread in modelled climate sensitivity. Nevertheless, biases in cloud simulation lead to regional errors on cloud radiative effect of several tens of watts per square meter” (9-3). In sum, “Projections of climate change are uncertain, firstly because they are primarily dependent on scenarios of future anthropogenic and natural forcings that are uncertain, secondly because of incomplete understanding and imprecise models of the climate system and finally because of the existence of internal climate variability” (12-8).

Output Application Uncertainties

Impacts and implications are uncertain because the climate system may change and cause totally novel regimes. Furthermore, ecosystems themselves are not stable over time and are highly unpredictable. There are feedbacks between climate and ecosystems that exhibit properties not easily predicted. For example, Cody (2011) identifies that, “melting snowpack up-regulated by temperature and dust deposition increases the vulnerability of forests to summer fires. That itself increases vulnerability to bark beetles. And beetles, by creating stands of dead stands of trees, increase fire vulnerability” (21). This kind of positive feedback may not always be accounted for in climate models, but landscape level outbreaks could have significant impacts on the water cycle through impacts on forest cover.

Human systems are highly variable and unpredictable as well. For example, if controlled burns were implemented in the situation above, it may exacerbate exposure to bark beetle, and thus doom the remaining trees. Predicting this intervention in a climate model would be impossible. This example may seem superficial, but consider the vast irrigation works of the Great Plains and American West. How are we to predict the future water usage, and thus impacts of climate change? What of groundwater overdraft, or oil shale development? This issues illustrate the point that impacts much removed from changes to temperature and precipitation regimes must be interpreted with added caution.

Thursday, January 2, 2014

The Value of Higher Education

I submit the following simple calculation of university revenue vs. instructor pay, and implore you to consider what it means for higher education. I don't include comparisons to the tuition rates of state schools or private schools or community colleges. I don't include those comparisons because I am busy doing other things, but I do compare in vs. out of state students at CU Boulder (freshmen, specially). This is an interesting metric - percent of tuition going to payment for instruction - one that could probably be better calculated on a per unit per semester basis rather than per student per class session basis (especially for large lecture classes). Economies of scale show themselves very strongly using this metric, explaining why MOOCs are so attractive. We could also generalize further by calculating on an annual basis, accounting for differences in quarter vs. semester systems. The higher the state subsidy, the less the student pays for tuition, the closer to 100% this value gets; and the higher instructor pay the closer to 100% this value gets. Values greater than 100% mean the instructor is making more than the university receives in revenue from tuition, which would mean a significant state subsidy.

But I delay unnecessarily...

students/class
19
total rev/sem
rev/class
rev/class/student
3/15ths of tuition
1100
20900
464.4444444
24.44444444

pay/sem
5090
pay/class
pay/class/student
percent pay
class hours/sem
45
113.1111111
5.953216374

24.35406699

At CU Boulder I can download a document that says Graduate Part Time Instructors in the College of Arts and Sciences (me) should be paid $5090 per course at .50 FTE (full-time equivalent) (which I am). For some reason my check is smaller, but this is just the recommended amount anyway (collective bargaining fail, blah blah blah). So, in a class of 19 (where I teach writing and rhetoric) this works out of about $113.11 per class (there are 45 classes per semester, 3 per week for 15 weeks), or $5.95 per student each time we meet. In some countries it's free, remember.

Of course, this in state CU student is paying $5,500 per semester in tuition (at 15 units), so for this 3 unit class this student is out $1,100. The university thus takes in $20,900 per semester, $464 per class, and $24.44 per student per class in this arrangement (i.e. the one am involved in). Very sweet deal for the university, since it pays me just 24.35% of that revenue. The rest goes... somewhere. Lots of paper to be pushed, you know (and there is for a university - lots of laws to comply with). Many loans to the football team to make.

Compare to the out of state table, and you can see why administrators are quick to admit out of state students (CU Boulder's undergraduate admissions rate is 86.9%; my alma UC Davis is 39.4%).

students/class
19
total rev/sem
rev/class
rev/class/student
3/15ths of tuition
3100
58900
1308.888889
68.88888889

pay/sem
5090
pay/class
pay/class/student
percent pay
class hours/sem
45
113.1111111
5.953216374

8.641765705

Here the (now 2013-2014 freshmen) out of state student is paying $15,500 per semester, regardless of the number of units. Which makes my cut just 8.64% of the out of state student's tuition.

We should be doing a couple things in higher education, and one of them is enhancing value. Getting this value towards 100% and above would mean that students are paying for what they're getting - education - not taking on the costs the rest of society refuses to bear and which are increasingly devoted to superficial and ancillary aspects of college life (this is in contrast with research, which confers benefits to students as well as society and which tuition has been used to fund).

Thursday, November 7, 2013

Sons of Oikos (2008)

Sons of Oikos: Ecology and Economics.
An investigation of the similarities and differences
between competition in free markets and ecosystems.

Abstract: Two of the most influential books on modern thought ever published are On the Origin of Species by Charles Darwin and The Wealth of Nations by Adam Smith. Each contain ideas which continue to shape their respective fields to this day, and a common thread between them is competition for scarce resources. In regards to competition, the similarities between ecosystems and free-market economies are strong. However, fundamental differences between the elements of study create a profound disconnect between the two systems; while ecosystems are self regulating and generate diversity, free-market economies trend toward monopoly. Therefore, some measure of regulation is needed in markets to prevent monopolistic behavior, and appeals to natural selection to justify laissez-faire are misplaced.

For Consideration:
"Financial Institutions have been merging into a smaller number of very large banks. Almost all banks are interrelated. So the financial ecology is swelling into gigantic, incestuous, bureaucratic banks. ... We have moved from a diversified ecology of small banks, with varied lending policies, to a more homogeneous framework of firms that all resemble one another."
-Nassim Taleb, Hedge Fund Manager (Taleb, 2007) (Terrapinn, 2006)

"In any circumstance where you shut off competition, the current largest player tends to cement their market share and is the ultimate winner."
-Tommy Payne, Reynolds American Vice President (Elliot, 2008)

“There is vicious natural selection going on right now in the financial services industry, and it’s appropriate. Those who weren’t on top of things are gone or going.”
-Mark Carney, Governor of the Bank of Canada (Quinn, 2008)

Oikos: Ancient Greek word roughly translatable as "household."
Ecology: derived from okologie, derived from oikos.
Economy: derived from oikonomia, also derived from oikos.

From the outset, the connection between ecology and economics has been implicit. One can hardly begin to talk about one without borrowing phrases from the other, and one can hardly begin to study one without perceiving on some level the connections between the two. And although the two fields have diverged significantly to address the specifics of their disciplines, the early writings of each field betray a fundamental commonality: on their most basic levels, both ecology and economics seek to understand the relationships between actors in a system of exchange under conditions of scarcity.
This essential similarity inevitably begs the question, just how similar are they? More specifically, how justified are economists or those which portend to understand economics in applying ecological principles to markets? Can we go so far as to declare that the mechanisms, principles, and conclusions of one are directly applicable to the other? Or should we reject any attempts at congruency as mere thought experiments with no real-world implications? Is there a middle ground? In order to address this, a more thorough understanding of the underlying mechanisms of the two fields is needed. But first, we must establish some parameters.
The actors in both ecology and economics, as well as the levels of organization they represent, can be broken down into four analogs, each nested within a previous classification like a set of Russian Dolls. The most inclusive analogs, representing the largest Russian Doll, are the ecosystem and the market, each being confined to a given geographic location. Within those geographic locations are members of the same species and firms that have more than one local representation in the market; that is, populations. Further nested are individual organisms and two types of firms: those which operate in only one geographic location, e.g. Redrum Burger in Davis, CA, and the lone local representation of a larger firm, e.g. the In-N-Out Burger across the street. Finally, the smallest doll; information. Genes are pieces of information used to direct an individual organism, so their economic equivalent would also be directing information, i.e. a firm's strategy, technology, or knowledge; in short, it's business model.
A tedious exercise, perhaps, but necessary in order to fully understand whether ecological principles can be applied to economics. For it is the soundness of these analogies, which have been represented in good faith, that ultimately determines the applicability of ecological mechanisms to economics.
Now, in so far as both fields study relationships in systems of exchange, there are many such relationships that can exist. In ecology, relationships are typically broken down by their effects on the individuals involved: positive, negative or neutral. A typical diagram of possible interactions takes the form of a matrix or grid (Fig. 1) (Bronstein, 1994).

From this array of six potential relationships, the most widely studied are undoubtedly those dealing with predation and competition (Bronstein, 1994). This is partially due to ideological and methodological biases inherent in the West, but it is mostly reflective of the fact that negative consequences, especially those resulting from competition, lie at the heart of Darwin's initial conception of evolution and ecology (Lennox & Wilson, 1994). Adam Smith, too, placed competition at the center of his understanding of markets (Heilbroner, 1986). Thus, it is the treatment of competition as an organizing principle in both disciplines which demands that we understand how each treats competition and what competition means in ecological and economic contexts.
A well agreed upon and sensible definition of competition in ecology describes a situation where multiple individuals seek to utilize the same resource and are detrimental to each other in the process (Birch, 1957). Note what this definition does not include. It does not tell us what the resource is or its properties; it could be a consumable resource such as food, or an inconsumable one such as territory. It does not indicate that the individuals are of the same or different species; they could be either, indeed it has been shown that intraspecific competition is stronger than interspecific competition in most cases due to their virtually identical ecological niche and resource requirements (Connell, 1983). Finally, the definition does not specify how exactly each actor is harmed; this could occur directly via fighting, or indirectly via depletion of a shared resource requirement.
But what of economics? The modern theoretical understanding of competition among firms includes two main points. First, there are multiple market actors. Second, their products are similar, if not identical (Mankiw, 2004). Given these conditions competition between the actors will result. This overlaps quite well with ecology's understanding of competition. However, it comes with a huge caveat: no firm has the ability to influence the market (Mankiw, 2004). That is, no firm is powerful enough to avoid competition. Because as Smith conceived of it, competition was a countervailing force against another, equally powerful force: self-interest (Heilbroner, 1986). In ecology, this principle is found in that all organisms are constantly "striving to the utmost to increase in numbers."(Darwin, 1859, p. 66) Turning to Smith (1776), he provided an anecdote to emphasize the pervasive nature of the principle; "It is not from the benevolence of the butcher, the brewer, or the baker that we expect our dinner, but form their regard to their own self-interest."(p. 6) But because untempered self-interest would produce numbers so great "that no country could support the product," (Darwin, 1859, p. 63) and create firms capable of influencing the market, an opposing force is necessary for the pattern of relationships to be self-regulating. That force is of course competition. Economically, Smith "show[s] us how the drive of individual self-interest in an environment of similarly motivated individuals will result in competition…" (Heilbroner, 1986, p. 55)  Darwin's long winded way of echoing Smith is that species with "much similarity in habits and construction" and which "fill nearly the same place in the economy of nature" will "come into competition with each other."(p. 76)
But what are Smith's actors competing for? Just as ecology leaves any number of possibilities, e.g. territory, water, sunlight, reduced carbon, so too does economics, e.g. real estate, labor, raw materials, money. To be specific, if both economics and ecology are systems of exchange, the primary units of exchange are money and high energy electrons. Without investing them, nothing can grow. Without expending them, nothing can acquire more resources. "The economy of nature" Darwin spoke of is organized around the transfer of reduced carbon from one trophic level to the next, and markets around the transfer of currency.
So it is clear that at their bases both disciplines see their systems as assemblages of self-interested individuals competing with each other for resources, and it is the push and pull of these opposing self-interests which regulate the systems and enable them to perpetuate.
But Darwin couched the discussion of competition within the context of "the struggle for existence."( p. 60) And it is clear that competition alone does not limit populations (Connell, 1983). The same can be said of firms; competition can only occur in situations where firms have met the challenges of simply existing, i.e. at least breaking even in the absence of any like firm. Lurking behind this whole discussion is the threat of failure. Without failure, without death, there can be no competition. Economists call the mitigation or outright prevention of failure "moral hazard" (White, 2008). In general, if firms are insulated from the threat of failure, from real risk, they will take "risks" such that any reward will go to them but losses, if they occur, will go to others. This does not occur in ecology except in kin relationships and mutualisms where an investment of resources or the resources themselves must be protected. For if risk insulation were wide spread, there could be no natural selection. And it is natural selection, the destruction of some forms and the preservation of others, which is the central mechanism of Darwinian evolution and ultimately drives the dynamic nature of ecosystems (Lennox & Wilson, 1994). In economics, Joseph Schumpeter called this "creative destruction" (Schumpeter, 1983). Broadly defined, changes in market pressures cause firms to fail, thus creating room for new firms to flourish. Put another way, organisms and firms are not struggling and competing to be "good," they are struggling and competing to not fail, to be "good enough". When framed in the context of competition, it is no surprise then that rather than attempting to outcompete other organisms or firms, individuals will invariably avoid competition as much as possible. For as was established earlier, competition by definition harms all parties involved. But avoiding competition completely is a practical impossibility, so we must now consider what occurs between parties engaged in it.
Ecology predicts two outcomes from competition: coexistence or competitive exclusion. The competitive exclusion principle arises logically from our concept of competition; individuals which utilize the same limiting resource in the same way, have the same niche, will either A) exclude all but one from the system by directly or indirectly inhibiting access to the limiting resource, or B) will adapt so as to no longer use the same limiting resource in the same way. Stated more simply, "complete competitors cannot coexist," or perhaps less tautologically, "ecological differentiation is the necessary condition for coexistence." (Hardin, 1960, p. 1296) The two possible outcomes, coexistence and exclusion, have been demonstrated most notably by Park (1954) and by Seaton and Antonovics (1967). In the former case, Park was able to demonstrate that a two species, con-generic mixture of flour beetles always resulted in competitive exclusion. In the latter case, Seaton and Antonovics showed the overall productivity of a system with two competitors to be higher than with a single species, but that the individual species reproduced less in the mixture than they did on their own. This was also observed by McClure and Price (1975), indicating that the competition was strong enough to cause some adaptation in ecological time to avoid that competition. Outside of the lab, we see the same results. Connell (1961) demonstrated realized niches simply and emphatically in the barnacle Chthamalus stellatus. There are other possible outcomes of competition besides realized niches; resource partitioning, character displacement, and sympatric speciation among them.
That said, a more accurate way of describing the phenomenon might be that these studies represent individuals' attempts to avoid competition more than they represent competition itself. In order to circumvent competition and the threat of death, organisms will either change how they exploit resources or, if motile, simply leave the area in search of other, less contested resources. That is, they flee scarcity. On the whole, this has resulted in a high degree of specificity in habit. A specialist with a narrow niche will be better at exploiting that niche's resources than a generalist capable of exploiting multiple niches. Generalists of course exist (humans chief among them), but when resources become more limited and competition more fierce, they respond by narrowing their niche breadths and thus become specialists over time (Ma & Levin, 2006) Eventually, however, this specialization leads to a precarious situation where organisms are dependant on an increasingly narrow range of environmental conditions for survival. When conditions change, which they invariably do, specialists may be unable to compete against generalists and will be selected against (Molles, 2008) Therefore, ecosystems with high amounts of disturbance would be expected to have more generalists than specialists relative to less disturbed ecosystems, which typically have more specialized organisms. The end result, then, is a vast amount of ecological diversity in form, function, and habit which changes through time.
So we see that in ecology, the mechanisms behind the competitive exclusion principle drive individuals to minimize their exposure to competitive pressures by adapting their methods of resource exploitation to varying degrees, and those that fail to sufficiently avoid competition are excluded from the system.
            But what of economics? When firms enter into competition they, like organisms, are competing for a set of resources. If uninhibited, they will, as in ecology, either exclude all but one from the system by directly or indirectly inhibiting access to the limiting resource, or adapt so as to no longer use the same limiting resources in the same way. To provide the economic standpoint on the issue, the quite exhaustive study of the very rapidly changing hard disk drive industry from 1956 through 1998 conducted by Barnett and McKendrick (2001) is exceptionally useful here, and worth quoting at length:
[Schumperter's] thinking was that organizations would innovate in order to enjoy so-called entrepreneurial rents, the returns that come with being positioned peerlessly ahead of the competition. (p. 5)

Note that Schumpeter's "entrepreneurial rents" are really derived from an adjustment in resource exploitation. Ultimately, the ability to do something new and unprecedented is merely another way of avoiding competition by attempting to exclude one's competitors. Barnett and McKendrick continue:
A second solution is the strategy of technological isolation, or differentiation – a possibility where markets contain differences based on dimensions such as geography or technology… Organizations sometimes find protection from competition by becoming adept at serving these isolated market positions. (p. 5)

            This looks strikingly similar to realized niches and specialization. Many such examples of what Dimmick (2006) called "displacement" have been found. Interestingly, Dimmick is not the first to use "displacement" to describe a differentiation process (Brown & Wilson, 1961). But what of competitive exclusion? Media markets provide ample examples of the phenomenon (Dimmick, 2006). Barnett and McKendrick also demonstrate the principle (Fig. 2) (Barnett & McKendrick, 2001)
Of the 169 firms to ever produce a hard disk drive on the world market, 155 exited the industry. Of course, all 155 were not necessarily competitively excluded; some were probably not viable entities and used a flawed business model (perhaps analogous to a fatal mutation). That said, it would not be a stretch to conclude that competition played a role in many of these market exits. Finally, and most startlingly, we see similarities in the results of these systems:
Strategic managers typically try to avoid competition, and to some degree the field of “strategic management” exists in order to explain how to attain so-called positional advantages that isolate an organization from rivalry. If isolation from rivalry removes a firm from the Red Queen [a form of competition that recognizes the relativity and continued dynamism of competitive relationships], however, then we pay a price in the long run for such positional advantage. We argue that more attention should be paid to the possibility that enduring positional advantages may, in fact, backfire over time by depriving organizations of the engine that generates capabilities. (p. 40-41)

This is the same mechanism underlying the long-term frailty of specialists in ecology, warning of the potential dead-end path of specialization that becomes so entrenched as to render the specialist incapable of sufficient adaptation to changing pressures.
And it is here that we arrive at a rather perplexing impasse. Up until now, we have seen that the general theoretical framework of ecology and economics is more or less congruent: multiple self-interested individuals seeking to exploit the same pool of resources will compete for those resources and either harm each other in the process to such a degree that one actor or class of actors will exclude all its competitors, or individuals will mitigate that competition by specializing in different exploitative methods. The initial conditions are the same, so the results should be the same. However, it is a bit more complicated than that.
In the early goings of this paper the soundness of the purportedly analogous cogs in these two systems was stated to be of the utmost importance. And it is. If one of those cogs were sufficiently weak, the whole machine built upon it would fail. Another way of looking at the question is to observe the products of each system more closely and account for any marked differences. And there is one glaring disparity between the two systems which must be addressed, but cannot be accounted for in our current set-up. Roughly put, markets show a much lower degree of firm diversity than ecosystems show species diversity.
The reason is simple; firms can become specialists in multiple niches, by various means, effectively becoming multiple "economic species" simultaneously. Being self-interested, firms will therefore attempt to exploit as many niches as possible. This will have the effect of rendering the strategy of resource partitioning as a means of avoiding competition useless, which will result in a situation of intense competition. This competition will be exacerbated by resource scarcity as before. Those firms which are not excluded will continue attempting to avoid competition. To do so, they have two options, neither of which is available in ecology: to stop competing while remaining separate firms, or to become a single firm. Failure to do either of those things will force competition to continue and, if left alone, will result inevitably in a single firm dominating all economic activity (Fig 3).
Figure 3.
Again, this does not happen in ecology. Indeed, a merger would be tantamount to one organism co-opting the genetic material of another, combing their physical machinery, and then selectively expressing the pooled genes to funnel the exploited resources back to the now single entity. Repeated many times over, this would give the merged organism the ability to occupy and completely dominate multiple, fundamentally different niches on different trophic levels simultaneously within a single ecosystem. Now, bacteria are able to engage in horizontal gene transfer, even accepting genetic material from plants, but this has not been observed to create an organism with the aforementioned capabilities (Thomas & Nielsen, 2005). Indeed, the integration of foreign DNA into the bacterial chromosome occurs less frequently by "several orders of magnitude" (Thomas & Nielsen, 2005, p. 714) as the number of base pairs in the foreign DNA and dissimilarity of those base pairs to the bacterium's own DNA increase (Thomas & Nielsen, 2005).
Additionally, firms do not senesce. Quite the opposite. Left to their own devices, firms are immortal. And firms do not reproduce so much as they simply expand. And while the fungus Armillaria ostoyae is known for its ability to imitate this behavior on a massive scale, even an organism estimated to be 1,500 years old, weigh 10,000kg, and cover 15 hectares has not invaded other niches (Smith, Bruhn, & Anderson, 1992). That is, Armillaria ostoyae hasn't, and won't, become a salmon while simultaneously being a mushroom.
Yet firms are capable of these sorts of behaviors. Brewing, for example, has seen a massive consolidation in recent years, Anheuser-Busch InBev and SABMiller chief among the resultant firms. Acquisitions are less common between major industries, but such combinations have occurred. The Vicks family of products and Dunkin' Donuts are both owned by Proctor and Gamble. Ben 'n' Jerry's and Brut are owned by Unilever. And Tesco, once a single UK grocer, has grown to enormous proportions and has branches dealing in finance, energy, internet service, and even health insurance.
But at first glance it appears that diversity has not been dampened. Quite the opposite. The diversity of goods and services available to consumers and firms alike has become staggering. The choices one faces in the milk section alone are overwhelming. But the creation of new and ever narrower niches, in this case facilitated by branding, is to be predicted, and, especially in niches or industries that are older than others, there are ultimately fewer and fewer firms vying for resources even as their product offerings expand. Some anti-competitive behavior has been obvious; cartels, trusts, outright monopolies. More common, though, is oligopoly, where a few firms come to dominate a niche or set of niches and cease to compete (Mankiw, 2004). The health insurance industry in the United States is one such example. However, oligopoly can only exist in a state of relative equilibrium so long as resource limitations are not strong. If enough pressure is applied, firms will be forced to compete and failures or adaptations will result. This pressure can come from declining demand (which retail firms hedge against by advertising), declining availability of credit (which can also result in a decline in consumer demand), or more tangible declines in physical resource availability. One need only look at the recent upheaval in global finance and US auto manufacturing to see that when pressure is applied, when resources become stressed, firms will (or ought to) rapidly combine or fail.
Certainly there are exceptions in the present economy, Redrum Burger among them, though it could be argued that sufficiently different market niches are being exploited in that case. Additionally, in areas where resources are not sufficiently stressed, these isolated firms can persist. It is important to remember that niches are also defined by geography; however, globalization is making geographic location less and less important, thus making specificity less and less possible. One of Barnett and McKendrick's main conclusions was that:
By the end of the study period, the competitive effect of foreign rivals has grown to be almost indistinguishable from that generated by domestic rivals. ... By the end of the 1990s, competition in the hard disk drive market had become global. (p. 37)

Globalization is having the same effect on global ecology. Invasive and exotic species regularly displace local endemics, and Cohen and Carlton (1998) have shown just how strong a force this can be using the San Francisco Bay and Delta ecosystem, finding that "exotic organisms typically account for 40 to 100% of the common species, … and up to 99% of the biomass." (Cohen and Carlton, 1998, p. 556) The world is becoming more homogenous, despite all the kinds of milk in the fridge.
So where does that leave the state of the analogy, and what are the implications to society? This not being a policy paper, there a few, broad conclusions that can be reached here. First, we must exercise extreme caution in applying principles from one field of study to any other. The phenomena and mechanisms may appear the same, but the inherent attributes of the objects being studied surely are not; otherwise, they would probably be under the same field of study. This does not preclude us from using aspects of one field to gain insight into another. As we have seen, economists have been able to understand their field much more richly thanks to the contributions of evolution and ecology. But following the ideas of a field which explain the behavior of actors with fundamentally different properties will lead to incorrect conclusions, with potentially dangerous results.
If the general conclusion reached in this paper is correct, that firms will avoid competitive pressures by monopolizing across all markets, then two questions must be asked. One, is this bad? And two, what can be done? To answer the first question, let us turn once more to what Adam Smith had to say on the subject: "The price of monopoly is upon every occasion the highest which can be got,"(p. 26) "monopoly, besides, is a great enemy to good management,"(p. 62) and not to put too fine of a point on it, Smith referred to "the wretched spirit of monopoly."(p. 187) Smith is of course not alone. It is nearly universal among economists that monopolistic behaviors are harmful to everyone but those holding the monopoly. So, question two.
Resolving the problem of monopolization, if we follow ecological principles, would ultimately require that competition be made a permanent fixture in as many niches as is possible. That is, some pressure must be strong enough to regulate self-interest and keep monopolistic behaviors in check. But if competition is not a strong enough force between enough actors, there must be a regulatory entity capable of emulating competition's effects or causing competition outright through a series of incentives. Those which appeal to ecological forces to support laissez-faire, most commonly natural selection and competition, are misguided and do not fully understand, or perhaps do not fully care about, the implications of unfettered competition in markets. Ultimately, some form of intervention, generally by governments although possibly by citizen groups or unions, is needed to prevent the monopolization of the world economy. Again, any specific prescription is beyond the scope of this paper; but if the words of so many familiar to the world economy are to be heeded, and if the conclusions reached here are to be believed, then there is no doubt that some medicine is in order.

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