<p>To support climate change mitigation and the global transition toward net-zero emissions, governments are implementing carbon pricing mechanisms such as carbon taxes and subsidies. This paper investigates optimal carbon emission reduction and pricing strategies in a two-level green supply chain under two policy scenarios: (i) carbon tax only and (ii) carbon tax with government subsidies. We develop a Stackelberg game-theoretic model where the manufacturer acts as the leader and determines the wholesale price and emission reduction level, while the retailer, as the follower, sets the retail price. The novelty of this study lies in its integrated modeling of both carbon tax and subsidy policies alongside consumer low-carbon preferences. Analytical solutions are derived for both scenarios, and comparative statics are conducted to examine how carbon tax rates, subsidy rates, and consumer low-carbon preferences influence supply chain decisions. Numerical simulations reveal that government subsidies significantly enhance manufacturers’ emission reduction efforts, increase market demand for low-carbon products, and improve overall supply chain profitability. The findings offer actionable insights for policymakers to design coordinated carbon pricing strategies that balance environmental and economic objectives and support the development of sustainable, low-carbon supply chains.</p>