The Czech economy faces a record slump due to the coronavirus pandemic. But economist and university rector Danuše Nerudová believes the crisis also presents an opportunity – to focus on “smart investments” in a wide range of areas. The goal, she says, should be two-fold: to mitigate the impact of the pandemic and foster advances in sustainable technologies.
Danuše Nerudová, a professor of public finance at Mendel University in Brno, is a member of KoroNERV-20 – a group of economists brainstorming how to whether the coronavirus crisis – and a researcher for FairTaxEU, a project advancing fair and sustainable taxation and social policy reform, to boost economic stability throughout the European Union.
As such, she is deeply involved in immediate domestic and long-term international economic and social issues. In an interview for Czech Radio, she began by outlining a range of “smart investments” she believes the government must focus on, in tandem with offering support to businesses impacted by the pandemic.
“Smart investments are those that go into environmental protection technologies, which, for example, make it possible to save electricity, lead to an increase in soil quality, to sustainable farming, to water retention in the countryside, all of which will help in the fight against drought.”
“The current situation shows that the economic theory of unlimited growth has somehow been exhausted, and that GDP is not the only indicator of the true quality of life in the state. For example, a country’s economy could grow 3 percent every year and its citizens lack access to potable water.
“So, it is time – and the coronavirus crisis is a factor in this – to reconsider these economic theories and models. It is key to change the way of thinking and incorporate sustainability into all the economic and social policies the state pursues.”
“Because while we may be able to soon overcome the coronavirus crisis, the problem of drought will still be with us, for which there is no vaccine. That is why sustainability must be at the forefront, and we must invest smartly from the crisis.”
Prof. Nerudová identifies a range of promising fields into which she believes the Czech Republic should invest, within the context of the coronavirus crisis, such as nanotechnology, biotechnology and chemistry. Among specific initiatives, she advocates investing into electricity storage technologies, such as large-capacity batteries.
The reason in part is that the Czech Republic has the largest share of coal in its energy mix in Europe, 43 percent, which is three times the European Union average, and only 13 percent renewable sources, three times less than the bloc’s average.
“Of course technological change does not happen instantly. This is a long-distance race, so to say, but one our country should definitely take part in. We are exporters of electricity, and we would need technologies that enable energy storage.”
“The Czech energy mix should change gradually so as not to have a major negative economic impact on companies. But we must take into account the negative impact burning coal has on the environment. Studies show a transition to renewable sources by 2050 would lead to a 2 percent rise in employment in the EU on average and a 7 percent increase in GDP growth.”
Prof. Nerudová believes in thinking globally and acting locally, for example right down to decentralising electricity generation not just to ‘Smart Cities’ but ‘Smart Villages’, providing incentives for sustainability among households. The coronavirus crisis, she says, affords a chance to reinterpret cost-benefit analyses for the long term.