Answer: C) They cannot live in the Earth's ruined environment.
In Arthut C. Clarke's story, people are living in the colony because planet Earth was destroyed. A is not right because they didn't lose a war on Earth. B B and C are not right because people are not in the colony because of a crash accident or because they prefer the Colony to Earth. They are there because the earth got destroyed and that's where they have to be in order to survive.