By using socio-technical scenarios, we investigate how present policy choices may affect the development of alternative transport fuels in Sweden. One important choice for policy lies in the balance between general tax exemptions stimulating the market for alternative fuels, and funding of research and development more directly promoting new technology. The implications of this choice are illustrated with four diverging development paths until 2020. In the market-oriented scenarios, we illustrate consequences of breaking the dominance of entrenched technologies and demonstrating a growing market potential for alternatives, but also the risks with a large focus on first generation renewable fuels. In the technology-oriented scenarios, we point out the value of keeping variety among niches in this stage of the transition. In conclusion, if policy is implemented without taking the dynamic forces within the system into account, there is a risk that any measure leads the system into a dead end. But if policy strives to balance the development in different parts of the technological system while making use of various prevailing forces of change, a multitude of different efforts can contribute to the development of a more sustainable transport system. (c) 2008 Elsevier Inc. All rights reserved.
