Abstract: In the case where consumers prefer to low carbon products and the supplier reduces its carbon emissions voluntarily, the questions of how to determine the optimum order quantity and in which situation the supplier should choose to reduce carbon emission are investigated. In addition, profits of the retailer and the supplier between cases of the non-carbon reduction and the carbon reduction are compared. It can be found that if the carbon emissions per unit product is too high, the supplier will not choose the carbon reduction strategy; when the carbon emission per unit product is low enough, choosing carbon reduction strategy can present a Pareto improvement; when the carbon emissions per unit product between the former two, the supplier's profit status becomes worse, but both the retailer and the supply chain channel's profits improve. In this case, there is space for improving the supply chain channel's earning status, but the improvement can't be realized in the absence of the supplier's support. To solve this problem, a revenue-sharing contract for coordinating the supply chain is designed. With this contract, both the supplier and the retailer achieve the Pareto improvement. Finally, how to determine the revenue sharing ration is analyzed with the Rubinstein bargaining model.

Key words: the preference for low carbon products, voluntary emission reductions, supply chain management, revenue-sharing contract