Assuming that both theon-grid electricity volume of power generation companies and carbon price follow Geometric Brownian Motion， two real option models for carbon emission reduction investment considering revenue floors are proposed for the two cases of with no operating cost and with operating cost respectively．Then the optimal revenue floor and the implementation duration for emission reduction are discussed． The results of the empirical analysis show that: 1) The revenue floor can incentivize power generation companies to invest in carbon emission reduction， but the optimal implementation duration may be less than the operating life of the equipment; 2) The optimal revenue floor is consistent with the lowest investment threshold of carbon emission reductions of power generation companies; 3) In the absence of operating costs， the revenue floor policy can save subsidy funds compared with the direct subsidies policy． However， whether subsidies funds can be saved depends on factors like on-grid electricity volumes in the case of operating costs．