Calculation of a Population Externality

It is known that when people generate externalities, a birth also generates an externality and efficiency requires a Pigou tax/subsidy on having children. The size of the externality from a birth is important for studying policy. We calculate the size of this "population externality" in a specific case: we consider a maintained hypothesis that greenhouse gas emissions are a serious problem and assume government reacts by optimally restricting emissions. Calculated population externalities are large under many assumptions (JEL D62, H23, J11, J13, Q54, Q58)