The authors introduced the negative externality of greenhouse gases (GHG) emission into Cournot model, analyzed manufacturers' maximization of profits and obtained the optimal emission of greenhouse gases based on social welfare function. The optimal emission is relatively more than Pigou’s analysis result, which means that the Pigou’s policy is not optimal, and the socially optimal amount of GHG emission does not require fully compensating for its negative externality. Further analysis shows that the optimal level of emission depends on the market structure. The higher the level of monopoly is, the lower the level of emission reduction should be.