The idea of calibrating State pension payments according to an individual's virility/fertility, rather than the number or value of contributions made to the social fund, is an interesting idea.
And sooner or later this has to happen.
Would any offspring have to be paying taxes in Ireland to be taken into account? Would the fact that we insist that children receive an education, at a significant cost to society, be taken into account?
Future taxation of the children in Ireland should not be taken into account. Nor education costs. Children are an investment not a liability. Education is increasing human capital - which has more value economically speaking than machines/infrastructure....
Children are future soldiers, workers, taxpayers.
Is it wise to unduly incentivise procreation from an environmental perspective?
It is not unduly.
You are absolutely right that the nub of this issue is changing demographics but I am personally very nervous about any proposal or solution that necessitates or implies an element of social engineering. It's not a huge intellectual jump to justify some really unpleasant practices/policies.
The current policies / the way state pensions are handled already results in massive social engineering. This is a fact!
In case of further interest you can check following studies:
Ehrlich, I. & J.-G. Chong (1998), "Social Security and the Real Economy: An Inquiry into Some Neglected Issues",
American Economic Review 88, p. 151–157.
Ehrlich, I. & J. Kim (2007),. "Social Security and Demographic Trends: Theory and Evidence from the International Experience",
Review of Economic Dynamics 10, p. 55-77.
Cigno, A., L. Casolaro & F. C. Rosati (2000), "The Role of Social Security in Household Decisions: VAR Estimates of Saving and Fertility Behaviour in Germany",
CESifo Working Paper Nr. 394.
Cigno, A. & F. C. Rosati (1996), "Jointly Determined Saving and Fertility Behaviour: Theory, and Estimates for Germany, Italy, UK and USA",
European Economic Review 40, p. 1561–1589.
Cigno, A. & F. C. Rosati (1997), "Rise and Fall of the Japanese Saving Rate: the Role of Social Security and Intra-family Transfers",
Japan and the World Economy 9, p. 81–92
Before children were generally speaking a result of sex (modern medicine weakened that connection significantly), "retirement planning" (also gone) and love for kids. And it is obvious that the love for children is not enough to guarantee population levels in Western countries/ the continuation/sustainability of social security systems or even our societies.
Now parents have to pay via tax/PRSI the pension of current pensioners, they have to pay for children which will pay future pensions - and are expected to save on top of that for their own pension. People who don't have children though can go to the Maledives and buy a new car and expect that someone elses children will pay their pension later on. So they don't invest in human capital (children) nor built up real capital (save in a private pension) but get a full state pension paid by someones elses investment in children.The governments have incentives in place not to have kids and people adapt accordingly. The system is designed to fail.
Accordingt to Hans-Werner Sinn, the former president of the ifo institute, the best way to handle the situation is to force everyone to save for a private pension. But for evey child you have, you can reduce your forced saving amount by one third - and can access one third of the already saved amount - plus you will have access to a full state pension after three kids. Furthermore tax incentives for families as done in France should be introduced and child care facilites (creche, etc) to be improved.
So either you create human capital or you create real capital.
That you are nervous / that this is seen as politically incorrect doesn't matter. These political correctness will sooner or later be shattered on the rocks of economic reality.
Some politicians are slowly realising this (I am doubtful about Ireland though am not following Irish politics closely enough - but water charges seem to be here much more important than the future of the country - but other European politicians do realise it slowly and start to act).