Steve and Iain,
I agree with you that the Bush speech represents both smart policy and smart politics. Greenpeace, et. al. freaking out is a good indicator on the politics side of it.
The most encouraging thing about the actual policy is summarized by a quote from Julianne Smith of CSIS in article titled “Bush’s green U-turn greeted with scepticism” in today’s Financial Times:
“Mr. Bush says technology, technology, technology, and the Europeans say regulation, regulation, regulation.”