In this paper, a nonlinear mathematical model is proposed and analyzed for the survival of biological species affected by a pollutant present in the environment. It is considered that the emission of the pollutant into the environment is dynamic in nature and depends on the environmental tax imposed on the emitters. It is also assumed that the environmental tax is imposed to control the emission of pollutants only when the concentration level of pollutants in the environment crosses a limit over which the pollutants starts causing harm to the population under consideration. Criteria for local stability, global stability and permanence are obtained using theory of ordinary differential equations. Numerical simulations are carried out to investigate the dynamics of the system using fourth order Runge–Kutta Method. It is found that, as the emission rate of pollutants in the environment increases, the density of biological species decreases. It may also be pointed out that the biological species may even become extinct if the rate of emission of pollutants increases continuously. However, if some environmental taxes are imposed to control the rate of emission of these pollutants into the environment, the density of biological species can be maintained at a desired level.