Why is D correct?

Good question, and while I am a bit surprised by how narrow the conclusion is given the fact that D is correct, I think we can still give a strong justification. Ultimately, use is inherently tied to production. If we use a product, we also must have manufactured it at some point. Ignoring the possible questions of recycling and the useful life of the product, it's probably safe to assume that the manufacture of a product is among the most environmental damaging parts of its lifecycle. Furthermore, the argument doesn't actually talk about the damage of using plastic and paper, but rather, the damage from disposing of them. This suggests that the passage is taking a general approach to the term use, rather than narrowly thinking about it as only the time that a consumer is using a finished product before it is thrown out.