In the space of one week the White House has moved from questioning climate change to a conviction that it is a grave threat that America must tackle. With the statement that “no single issue is as fundamental to our future as energy”, President Obama shot down yesterday the false choice of prosperity versus clean energy. With his description of unchecked climate change leading in the long term to “conflict, terrible storms and irreversible catastrophe”, he reversed years of attempts by the Bush Administration to undermine the science and downplay the issue.

Coming only six days after his inauguration, the speech left little doubt that this President is deadly serious about building a low-carbon economy. He argued convincingly that oil dependency has “bankrolled dictators”, weakened national security and threatened the planet. He held out the prospect of 460,000 new jobs on America's road to clean energy, beginning with the laying of transmission lines, insulating two million homes and doubling renewable energy within three years. Jobs were emphasised partly to help to win round some of the congressional Republicans who are hostile to the stimulus package. The main announcement yesterday tackled the car, that icon of American freedom and pollution. At a time when large numbers of jobs in the car industry are under threat, it would have been easy to stall on fuel-efficiency standards. But President Obama does not believe that America has a future building gas guzzlers. He stated that “the fuel-efficient cars of tomorrow must be built here in the US”. He has brought forward new standards for cars and trucks to 2011, recognising that there is little time left to make America's industry competitive.

He also signalled that the Federal Government would cease to work against states that wish to set more ambitious environmental targets. The Bush Administration had opposed fiercely any imposition of binding emissions limits on the car industry. In doing so it had set itself at loggerheads with the wideranging policies to limit greenhouse gases created by the Republican Governor of California, Arnold Schwarzenegger. California was refused a waiver from the so-called Clean Air Act. This had created the absurd situation in which a total of 13 states were prevented from setting more stringent fuel-efficiency standards than were mandated by the Environmental Protection Agency.

President Obama was at pains to state that the commonsense measures he announced yesterday are only a “downpayment” on the broader effort to reduce dependency on foreign oil. Clearly, much more is needed. America will need to set a price of carbon that encompasses coal, gas and oil, probably through a cap and trade scheme that is being debated hotly within the Obama Administration. There are also big questions about the “global coalition” on climate change, which the President says America is ready to lead.

But what matters most, at this moment, is the change of tone. Yesterday sent a dramatic signal to the world that America at last understands the need to put its own house in order on climate change. And that it can see commercial advantages in clean energy that will be lost to Europe, unless European politicians move swiftly to overcome their own past timidity.