Written by: Lorne Stockman, Greg Muttitt, and Alex Doukas 

The price of oil crashed to below $30 per barrel in early 2016, prompting not only a flurry of news stories highlighting things that cost more than a barrel of oil (including a bucket of KFC fried chicken), but also alarm from industry players and their supporters in elected office.

The sharp drop in oil prices has led to calls for treasuries to roll out new subsidies and bailouts to prop up oil companies, as well as calls for international financial institutions to bail out oil-producing countries in crisis. On the international bailout front, teams from the IMF and World Bank have already visited Azerbaijan this year, and the IMF’s Christine Lagarde visited Nigeria in January, though Nigeria’s government is seeking emergency loans from the World Bank and Asian Development Bank in an attempt to stave off a broader IMF bailout.

At the national level, new subsidies and bailout packages have been floated in a number of jurisdictions: the U.K. government has already committed £250 million ($360 million) to help its flagging North Sea oil and gas sector, in addition to nearly $2 billion worth of new tax breaks implemented last year. This is on top of the roughly $9 billion in federal subsidies and tax breaks UK oil and gas producers already receive. In Brazil, bailout speculation has focused on state-owned Petrobras.

Subsidies to oil and gas production tend to flow in good times and in bad, so the calls for additional government support during downturns can rankle next to the record profits recorded during periods of high oil prices. For example, between 2008 and 2014, oil companies in the U.K. North Sea achieved a 33% rate of return, compared to 10% for companies in other sectors (excluding banks). In 2008, ExxonMobil Senior VP Stephen Simon justified Big Oil’s record profits by saying, “We depend on high earnings during the up cycle to sustain this level of investment over the long term, including the down cycles.” Yet industry’s reaction in down cycles, calling for additional government support whether in countries with production dominated by private interests or state-owned enterprises, calls this claim into question.

With calls for bailouts growing across a number of jurisdictions, it’s worth considering what role subsidies have already played in bringing about the industry’s current conundrum. Across the G20, during 2013 and 2014 – a period of relatively high oil prices – governments gave out an annual average of $78 billion in direct subsidies and tax breaks, and a whopping $452 billion in support to fossil fuel producers overall each year. What’s more, the oil price crash was precipitated by the U.S. fracking boom that unlocked billions of barrels of crude on the back of subsidies, cheap credit, and lax environmental regulations. In the U.S. case, although industry has denied interest in a government bailout, they are pushing hard to further roll back environmental safeguards, and to fast track infrastructure permits, relying on the narrative that the industry needs help.

One of the industry’s top champions in congress, Senator Murkowski (R. Alaska), Chair of the Senate Energy and Natural Resources Committee, is currently stewarding an energy bill that contains provisions and that would speed up approval of liquefied natural gas exports that would give fracking a boost, and that would also authorize new subsidies to coal-fired power production.

The dissonance between these calls for new government support to the oil and gas industry, compared to the commitments made in Paris just last December to keep climate change to within 1.5 degrees Celsius, is striking. Christiana Figueres, the head of the UN’s top climate body, tweeted from a climate investment conference last week, “We cannot put money into the wrong energy systems. The world cannot afford new oil and gas, and we cannot afford coal.” And in his State of the Union address this year, President Obama urged, “Rather than subsidize the past, we should invest in the future – especially in communities that rely on fossil fuels. We do them no favor when we don’t show them where the trends are going.”

In light of the Paris Agreement, and the growing recognition that scarce public money can no longer be spent locking in long-lived dirty energy infrastructure if the world hopes to achieve shared climate goals, bailout talks should consider carefully: (a) how financial assistance can be used to steer countries and communities away from fossil fuel dependence through economic diversification; and, (b) the level of subsidy that producers already receive, in both good and bad years, and what the role of past subsidies have been in driving the current economic upheaval among producers.

If history is any guide, subsidies introduced during moments of panic tend to persist for years or even decades after conditions for producers improve. Moves to increase subsidies could unlock new pools of carbon at the very time world leaders have agreed to ambitious climate goals. Decisionmakers must be pressured to fully consider the long term climate and fiscal implications of these subsidy and bailout proposals.