Odds are that this is a case of corroding (and thus shorting out) of the contacts inside the little switch that's on top of the "octopus" -- this is the junction box for all the brake lines that serves to compare line pressures between the two triangular brake circuits. This contraption is located under your car just aft of the left front fender -- it's got a bunch of brake lines all converging on it (hence the nickname).

You don't necessarily have to replace the unit -- just the guts of the little switch that the single wire attaches to (the switch is supposed to ground the light through this wire if there's any difference in braking pressure). The repair kit is Volvo p/n 272702-2 ($36.23), and you can fix it easily if you can work upside down under the car and work with a small mirror and forceps (tweezers).

To first prove that this is the problem, crawl under the car and disconnect that aforementioned wire (wrap it with tape so it doesn't short against anything metal). If the flicker light stops, then this is the problem.