C is wrong because of grammar
C says : Because paper of all kinds are the biggest single components in municipal trash, many municipalities have tried to recycle to reduce the cost of trash disposal---->"paper" is singular and "are" plural
B is wrong because of meaning issue
B says : Because paper of all kinds is the biggest single component in municipal trash, many municipalities tried to recycle so that the cost of trash disposal is reduced.
the subordinate clause is in simple tense so if we put the main clause in simple past then the sequencing of the events will get effected .the "trying thing" cannot happen prior to the fact that "paper of all kinds is the biggest single component in municipal trash".this thing is taken care of in A since A uses "present perfect"
also i somehow don't like the usage of "so that" in B --->i believe GMAC mostly uses "so X that" construction where "so" acts as intensifier ,for instance :it is so humid that ...blah blah ....(though i am little wary about this point)
