This question is a little bit odd as there really is no argument to dissect, it just gives you a situation. The situation goes like this:
An HCP allows developers to use land in exchange for a promise to preserve habitat, though some endangered species are lost in the process → Environmentalists are happy because the developers don't ignore environmental laws & Property Owners are happy because HCPs are less restrictive.
All in all, everyone wins a little bit but no one wins completely. There are pros and cons for each party.
(A) Environmentalists should compromise with developers? Who's to say that the developers should get the upper hand? This answer choice seems to imply that there is a little bit of a unequal power dynamic and that is not what is going on here. Plus, we have no idea who is compromising with who - they are really compromising together.
(B) Developers adhere → Laws are not overburdensome. We don't really know if these laws are overburdensome or not. We probably assume that they aren't in which case this doesn't really do anything to our argument.
(C) "No one's interest is served well" is a bit fishy here. The argument makes it very clearly that both parties' interests are served well.
(E) So what if it is most effective? We are not talking about what is most/less effective. We are just talking about what is happening here. Maybe it is not the most effective means?
(D) is correct. This is saying that both developers and environmentalists are getting what they want and that is exactly what the argument is referring to.