It isn't strictly speaking an impact investment (yet), but mileage-based insurance and the companies that offer it are on to something.
This is what I am talking about: insurance that is based on the amount of mileage someone drives rather than more general assumptions. The insurance program is also known as pay-as-you-drive, distance-based, usage-based and per-mile-based. According to one agency that offers such a program, the Environmental Insurance Agency based in Boston, studies show that if insurance were priced this way drivers would reduce their mileage by as much as 10 percent. "This would significantly reduce fossil fuel consumption, carbon emissions and traffic congestion," EIA says.
California has kicked around a mileage-based tax on gas. It hasn't gone anywhere. And there have been other iterations of the concept. Toll roads are a bright and shining example of this.
Behind the pay-for-use idea is, of course, an environmental message. EIA (www.eiainsurance.com), the agency that got me thinking about and writing about this topic, supports the Conservation Law Foundation, dedicated to solving environmental problems facing New England. The sale of premium policies therefore helps pay for this support. This is, of course, an indirect impact investment.
Rewarding people for environmental stewardship in my mind is far superior than penalties (read carbon taxes). Perhaps utilities and government agencies should be taking this route rather than more costly and awkward eco-punishment measures. Wind your way through how carbon credits and offsets work, never mind carbon trading, and you'll see what I mean. The impact of rewards would be greater than all this. And it might even tee things up for an investment category businesses could live with. In other words, tax credits not taxes.