In this paper, we investigate the impact of redistribution and taxation on inequality and pollution. We build a two-sector Ramsey model with a green good, a polluting good, heterogeneous households with non-homothetic preferences, and a subsistence level of consumption for the polluting commodity. We find that under heterogeneous preferences, lump-sum transfers reduce inequality but harms the environment. In the same vein, increasing the environmental tax under a high level of subsistence consumption leads to lower inequalities when coupled with high redistribution, but increases pollution. Therefore, there may be a tradeoff between inequality reduction and pollution mitigation. Looking at the stability properties of the economy, we find that the level of subsistence consumption and the externality matter. This leaves room for taxation and redistribution to play a role in the stability of the equilibrium.