The idea of the government wanting us to move to smaller, greener cars through heavy taxing is something of a myth in my opinion. They know that they can get away with charging the driving public because they will pay the extortionate amounts. We're already taxed so heavily through the petrol we pay, parking and congestion charges, this 'low emission' nonsense is just another way of extracting more money out of us.
Its a cost/benefit thing at the end of the day - the income reduction incurred by the government from drivers who do move to smaller cars will easily be offset by the drivers who'll bite the bullet and pay continue paying the criminally hiked amounts.