Abstract: To alleviate the problem of financing difficulties for both the supply and demand sides with capital constraints under the low-carbon environment,a bi-level Stackelberg game model with the bank as the leader,the supplier as the subleader,and the carbon-dependent manufacturer as the follower,is formulated under the government’s “carbon cap-and-trade mechanism”.In the stochastic demand scenario,the supplier’s optimal wholesale price decision,the manufacturer’s optimal ordering and emission reduction decisions,and bank’s the optimal interest rate decision are investigated.Theoretical and numerical analyses show that,when the emission cap allocated by the government low,it will increase the bankruptcy risk of the manufacturer,and the manufacturer with limited liability will adopt a more aggressive ordering strategy.In order to reduce losses from the bankruptcy risk of borrowers,the bank will strengthen their regulation of the whole supply chain operation.The more free funds the supplier has,the more beneficial it is for the manufacturer and the overall supply chain performance.

Key words: Carbon emission quota, Low-carbon supply chain, Capital constraints, Demand stochastic, Bi-level Stackelberg game