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RR RUEHAG RUEHDF RUEHIK RUEHLZ RUEHROV RUEHSL RUEHSR
DE RUEHVI #0903/01 2021454
ZNR UUUUU ZZH
R 211454Z JUL 09
FM AMEMBASSY VIENNA
TO RUEHC/SECSTATE WASHDC 3023
INFO RUCPDOC/USDOC WASHDC
RUEHRC/USDA FAS WASHDC 1251
RUCNMEM/EU MEMBER STATES

UNCLAS SECTION 01 OF 02 VIENNA 000903 
 
SIPDIS, SENSITIVE 
 
EU/ERA FOR MATTHEW BEH 
 
E.O. 12958: N/A 
TAGS: ENRG EPET KGHG EAGR SENV TRGY AU
SUBJECT: OPEC-Funded Biofuels Study Sparks Controversy at 
Multinational IIASA 
 
REF: Vienna 363 
 
¶1. (SBU) SUMMARY: A recent study on "Biofuels and Food Security" -- 
commissioned by the Vienna-based OPEC Fund for International 
Development (OFID) and prepared by researchers at the multinational 
Institute of Applied Systems Analysis (IIASA) -- has sparked 
controversy in the energy community.  IIASA leadership temporarily 
suspended the study's lead researchers in June because the study was 
not authorized before publication and because an abbreviated version 
presented by OFID contained "scientific flaws."  While the study's 
conclusions are not new (it finds that rapidly expanding 
first-generation biofuels production can threaten food security), 
the project's close links to OPEC may have struck a nerve for some 
at IIASA (which receives support from a number the USG and other 
governments).  OFID and OPEC leadership continue to trumpet the 
study, most recent at the multinational "Vienna Energy Conference" 
in late June.  END SUMMARY. 
 
Background on IIASA 
- - - - - - - - - - 
 
¶2. (U) IIASA was formed in 1972 as venue for collaboration among 
Western and Soviet-bloc scientists on global issues such as energy, 
the environment, and health.  Located outside Vienna, IIASA has 
transcended its original function as an East-West bridge and become 
one of the world's leading institutes for modeling complex 
socio-economic phenomena such as food/energy production and their 
effects on land use and emissions.  Though IIASA is governed as an 
international body, the Austrian government is a strong supporter 
and sees the institute as part of Austria's scientific landscape. 
The USG has funded IIASA since 1992 (after a break in funding from 
1983-1991).  The U.S. is IIASA's largest single contributor and 
provides 24 percent of its official government support (2008) -- 
member state donations represent little over half (52%) of IIASA's 
operating income. 
 
Panning First-Generation Bio-Fuels 
- - - - - - - - - - - - - - - - - - 
 
¶3. (U) As a cartel of oil producers, OPEC has consistently 
campaigned against biofuels production as unsustainable and bad for 
the world's poor.  Presumably to back those claims, OPEC's 
development arm OFID funded a "seminal study" of the effects of 
bio-fuels production to be carried out by IIASA.  The study finds 
that further increasing first-generation biofuels production would: 
-- exacerbate hunger, 
-- increase food prices, 
-- increase competition for arable land, 
-- fueling deforestation, 
-- threaten biodiversity, 
-- have minimal impact on greenhouse gas emissions, and 
-- bring only "modest benefits" for rural development. 
The study finds that first-generation biofuels harm food security in 
the developing world, promote deforestation and habitat loss, and 
won't deliver significant greenhouse gas mitigation for at least 30 
years.  The study does find substantial potential for 
second-generation biofuels to bolster energy security and rural 
development without harming the world's poor consumers or the 
environment. 
 
¶4. (U) NOTE: "Biofuels and Food Security" is described at 
www.ofid.org/images/frontpage/TopStories/biof uels.pdf 
A 44-page overview is available at 
www.ofid.org/publications/SpecialPublications .aspx 
 
¶5. (U) The study has now triggered a clash between the IIASA 
administration and two of the study's authors, energy expert 
Guenther Fischer and food expert Mahendra Shah (both employed by 
IIASA).  According to press reports, IIASA director Detlof von 
Winterfeldt did not approve the 44-page overview (cited above) 
published by OFID in March, prior to the study's official rollout 
May 6 on the sidelines of the UN Commission on Sustainable 
Development session 17 (CSD-17) in New York.  Winterfeldt is quoted 
as saying that the study had "scientific flaws which could have been 
avoided if the researchers had observed IIASA rules." 
 
¶6. (SBU) Winterfeldt apparently ordered Fischer and Shah not to 
attend the study's rollout on May 6, but the authors went ahead (Mr. 
Shah sat on the panel with OPEC representatives).  As a consequence, 
IIASA suspended its contracts with Shah and Fischer.  In an open 
letter, the researchers protested against such disciplinary 
measures, accusing IIASA of "censuring" their work and "bullying" 
them.  Since then, the IIASA administration has agreed to mediation 
in the case:  Shah and Fischer remain on the payroll and may use 
IIASA facilities until proceedings are complete. 
 
¶7. (U) This OFID study is not the first time an IIASA study has 
criticized the effects of biofuels production.  In May 2008, for 
 
VIENNA 00000903  002 OF 002 
 
 
instance, Shah and Fischer came to similar conclusions in a study 
("Food Security and Sustainable Agriculture: the Challenges of 
Climate Change in Sub-Saharan Africa") carried out for the FAO and 
Austrian government.  Shah was quoted at the time saying that "the 
absurd biofuel policy has contributed to the doubling of staple food 
prices in the last two years ... in many developing countries over 
70% of the household budget is for food." 
 
¶8. (SBU) An IIASA-approved full version of the latest biofuels study 
was circulated at the Vienna International Energy Conference in 
June.  (COMMENT: that major conference was part of Austria's 
unsuccessful bid to host the headquarters for the nascent 
International Renewable Energy Agency/IRENA -- END COMMENT).  At the 
conference, an OPEC official (OFID Secretary General Jasir 
Al-Herbish, formerly of the Saudi oil ministry) cited the IIASA 
study as evidence that biofuels are unsustainable and bad for the 
developing world -- but Brazilian Energy Vice-Minister Andr Amado 
responded by vigorously defending sugar cane as an appropriate 
first-generation biofuel.  Unlike at an OPEC conference in Vienna in 
March (reftel), at the June event OPEC's anti-biofuels stance 
appeared to have only tepid support among developing country 
representatives. 
 
COMMENT 
- - - - 
 
¶9. Media attention to the controversy over OPEC funding for the 
biofuels study at IIASA has been limited, and IIASA's official 
position itself is not entirely clear (von Winterfeldt criticized 
OFID versions of the study, but the full version contains a foreword 
by him).  IIASA has unique capacities to model the socio-economic 
dimensions of climate and energy regulatino -- it claims "unique 
(capacity) to provide scientific leadership on very complex policy 
issues" (Winterfeld).  The current controversy is unlikely to 
permanently tarnish IIASA's strong reputation -- but illustrates 
OPEC's continued determination to seek allies on biofuels and other 
regulatory issues affecting long-term oil producer interests. 
 
HOH