Problem with "market-friendly" interventions

Buy a car and you incur significant fixed costs.  The more you drive, the lower your average cost.  When ownership taxes add to the fixed cost, they encourage more driving.

Research by National University of Singapore economists investigates the specifics for that city's Certificate of Entitlement (COE, applied to auto ownership) plus its Additional Registration Fee (ARF, applied to new car purchases).  Specifically, as the tax goes up by 1 percent, kilometers driven increase by 0.345 percent.

Singapore planners have been widely praised for having implemented road congestion pricing in 1975.  The other taxes were meant to complement it.  But even "market-friendly" interventions can have a downside that has to be considered.  In this case, the COE and the ARF work against the congestion tax.