Biofuel production has recently attracted a great deal of attention. Some anticipate substantial social and environmental benefits, while at the same time expecting sound profitability for investors. Others are more doubtful, envisaging large trade-offs between the pursuit of social, environmental and economic objectives, particularly in poor countries in the tropics. The paper explores these issues in Tanzania, which is a forerunner in Africa in the cultivation of a bio-oil shrub called Jatropha curcas L. We trace how isolated Jatropha biofuel experiments developed since their inception in early 2005 towards a fully fledged sectoral production and innovation system; and investigate to what extent that system has been capable of developing ànd maintaining sustainable practices and producing sustainable outcomes. The application of evolutionary economic theory allows us to view the development processes in the sector as a result of evolutionary variation and selection on the one hand, and revolutionary contestation between different coalitions of stakeholders on the other. Both these processes constitute significant engines of change in the sector. While variation and selection is driven predominantly by localised learning, the conflict-driven dynamics are highly globalised. The sector is found to have moved some way towards a full sectoral innovation and production system, but it is impossible to predict whether a viable sector with a strong "triple bottom line" orientation will ultimate emerge, since many issues surrounding the social, environmental and financial sustainability still remain unresolved.
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