Abstract: The decision of the supply chain with supplier participating in carbon emission reduction under carbon labelling system is studied. Considering consumer's low-carbon preference, three models are built:neither the manufacturer nor the supplier invests in carbon emission reduction (model N), only the manufacturer invests in carbon emission reduction (model M), both the supplier and the manufacturer invest in carbon emission reduction (model SM). The results show that the profits in model SM is higher than that in model N and in model M. Meanwhile, the carbon emission in model SM is lower than that in model N and in model M. Thus supplier's participating in emission reduction promotes both the environmental benefit and economic benefit.

Key words: carbon labelling system, consumer's low-carbon preference, carbon emission reduction invest, supplier participation