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Explanation:

Option 1 has a parallelism error as ‘improvement’ and ‘encouragement’ are nouns while ‘reducing’ is a verb. Thus in order to make it grammatically correct, it should be changed to ‘reduction’. Options 2 and 4 have a verb error as ‘encourage’ should be followed by ‘reduce’ and not ‘to reductions’ or ‘to reducing’ respectively. Option 3 correctly rephrases the underlined part of the sentence. Retain it.
Hence, the correct answer is option 3.

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