Abstract: For the existence of carbon emission reduction cost, the retail price of the products is so high that the market demand is low, which restricts the promotion of low-carbon products. Our motivation comes from the fact that most consumers think that the price of low-carbon products is so high that they are not willing to buy. So, how to reduce the price of low-carbon products so that the demand can be improved has become an important issue in enterprise operation. On the background of a bilateral-monopoly supply chain consisting of a single manufacturer and a single retailer, Stackelberg models are established based on the carbon emission reduction cost-sharing contract. And the backward induction is regarded as an efficient method of solving the problem. We analyze how the order quantity, the profits of supply chain members and the whole supply chain are influenced by the carbon emission reduction cost-sharing contract within the supply chain. According to the research, when the carbon emission reduction cost -sharing contract is introduced into the model, it leads a good consequence that the optimal order quantity of the low-carbon product increases, the retail price decreases, and the manufacturer and the retailer will get Pareto improvement on certain condition. On the basis, a further analysis is carried on and a conclusion shows that consumers' awareness and emotional factors of low-carbon products have a positive effect on enterprise's order quantity and profit, while have a negative effect on the optimal cost-sharing rate shared by the manufacture. Our key contribution lies in modeling the cost-sharing contract to coordinate the relationship between the manufacturer and retailer. At the same time, the supply chain member can get Pareto improvement on certain condition.

Key words: bilateral-monopoly supply chain, low-carbon cognition, carbon emission reduction cost, cost-sharing contract, the optimal order quantity