Carbon pricing instruments (CPI) are deemed effective in achieving emission reductions, as they induce emission reductions through price signals and generate revenues which can later be used effectively. Sri Lanka is a country that is among the top apparel manufacturers in South Asia, with massive emission levels in the apparel manufacturing firms. The prospect of using CPIs in the Sri Lankan apparel sector was studied by evaluating the response of firms. A questionnaire survey was conducted with professionals representing ten key apparel firms in Sri Lanka to evaluate the response of apparel firms to a prospective CPI. Data collected through the questionnaire survey was analysed using Fuzzy Extended Analytic Hierarchy Process (FEAHP). Expert interviews with five experts specialised in environmental sustainability in the Sri Lankan apparel sector were conducted to determine the suitable options to utilise revenue generated by CIPs. It was found that apparel firms are willing to invest in new technologies to reduce emissions in response to a prospective CPI. Using carbon pricing revenue in programmes that target emission reductions was recommended. The most suitable option is facilitating the introduction of renewable and energy-efficient technologies.