The American Recovery and Reinvestment Act injected almost nine hundred billion dollars into the U.S. economy to help the nation recover from the 2008 financial crisis. Ninety billion dollars went to clean energy, with the intention of jump-starting a new “green economy” to replace aging fossil-fuel technologies. Instead, the bill may have done the opposite. Low interest rates, which made borrowing easier, encouraged a flood of financing for the young fracking industry, which used novel chemical techniques to extract gas and oil.  Fracking boomed, and made the U.S. the leading producer of oil and gas by some estimates. The financial journalist Bethany McLean and the investor and hedge-fund manager Jim Chanos tell The New Yorker’s Eliza Griswold that something in the fracking math doesn’t add up. If interest rates rise, reducing the flow of cheap capital, they believe that the industry will collapse.  

Then, the former Treasury Secretary Hank Paulson tells Adam Davidson what went wrong in Obama’s policy. Subsidies for specific industries, like solar, can’t change the market significantly enough, Paulson says. In his view—one shared by a growing consensus of economists—we need to correctly assess the costs of carbon emissions to society, and charge those costs to the emissions’ producers: a carbon tax. Then, with a more level playing field, the market can pick the best source of energy.