This paper develops an optimal tax system `a la Mirrlees with two novel features. First, earning abilities are determined endogenously; second, energy, a polluting good, is used both as a factor of production and a final consumption good. The model is calibrated for the French economy. The results are: (i) Replacing the current system with an optimal general income tax is redistributive towards the poor and increases social welfare by an equivalent of 500 to 1,200 euro per household; (ii) optimal tax on energy as an input is always equal to its marginal social damage; (iii) optimal tax on energy as a consumption good is less than its marginal social damage; (iv) the tax will turn to an outright subsidy when the inequality aversion index is high; (v) environmental taxes perse, increase social welfare modestly (anywhere between one to six euro per household); vi) making polluting good taxes nonlinear further increases social welfare by 5 to 16 euro per household; (vii) taxation of energy benefits the rich and its subsidization benefits the poor.