Abstract: Pressure from the government and the market has forces enterprises to carry out low-carbon technology innovation and achieve emission reduction targets. Therefore, under the circumstances of carbon trading and information asymmetry, the decision makers of low carbon technology innovation and the incentive contracts of the government are studied. The research shows that, when information is asymmetrical, the government can observe the manufacturer's low carbon technology innovation cost and the consumers' low carbon preference to realize the optimal incentive by the design of the incentive contracts. The incentive contracts effectively improves the motive force of the manufacturer's technological innovation, and derives the influence factors of the best decision of the manufacturer; the manufacturer and the government should try to improve consumers' low carbon preference through advertising and policy, so as to achieve the goal of reducing carbon emissions.

Key words: carbon trading, low carbon preference, information asymmetry, technological innovation, incentive contracts