This paper considers first best allocations in an economy where a

consumption good is produced using labor. Production results in

pollution, which is a public bad. Pollution abatement can be achiedved

either by restricting poduction output or by using labor. We consider

how the first best allocation varies with polulation size. consumers are

unambiguously worse off when the population is larger. However,

surprisingly, there is no single optimal policy on how pollution and

labor should vary with population size. For standard models of

preferences and technology it might be desirable either to increase or

to reduce emissions and/or labor, depending on parameters. Despite such

ambiguity in the first best level of emissions, the Pigouvian tax wihich

implements the first best is a non-decreasing function of the population

size. We conclude that, since the comparative statics of the first best

are so ambiguous, sensible debate on environmental policy cannot proceed

without a careful determination of actual preferences and technology.