A bi-objective distributed flow-shop scheduling problem with multistep electricity pricing and carbon emissions is studied. One objective is to minimise the completion time of production, and the other is to minimise the total cost of multistep electricity pricing and carbon emissions. A mixed integer programming model and a two-stage knowledge based cooperative algorithm with a local reinforcement strategy are proposed for the problem. The extensive numerical experiments show that the two-stage algorithm was effective statistical significantly in generating non-dominated solution sets and Pareto frontiers. Simulations on Electricity Prices are applied to examine different multistep electricity pricing schemes, and management implications were drawn for both government and companies.