<p>The correct answer is (C) approval.</p>
<p>In this sentence, the city council is being referred to as the subject that will not grant something. The word "grant" is a verb, but in this context, it needs to be used as a noun. The noun form of "grant" is "approval." So, the sentence should read: "The city council will not grant approval for the construction of the new factory as its damage to the environment will be severe."</p>
<p>The other options, (A) approve, (B) approvable, and (D) approved, are all forms of the verb "approve" and do not fit the context of the sentence. Option (A) is the verb form of "approval," option (B) is an adjective that means capable of being approved, and option (D) is the past tense form of "approve."</p>