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Traditionally, reserves are deployed on generation side. As load demands increase greatly and carbon emission cap policy is implemented, reserve market will suffer from both poor reserve resources and extreme price strike. In this paper, a novel philosophy is presented which is called demand side reserve (DSR) based on demand response (DR) considering carbon emission trading (CET) under smart grid. Firstly, DSRs will be classified into three types by their characteristics and clearing cost models of them are given respectively. CET approach is employed here to describe an opportunity cost of DSRs and encourage customers to participate into carbon emission reduction. Secondly, a DSR-scheduling framework is developed which could realize the carbon emission quotas circulation from demand side to generation side under the CET system. Finally, simulation on a test system is used to illustrate the benefits of the proposed view.