Earthquakes, the most frequent natural disaster in Japan, strike the 430 inhabited Japanese islands approximately 1,500 times per year, causing significant structural damage, and they cost the nation $70 billion in repair costs and lost productivity every year.
(A) damage, and they cost the nation $70 billion in repair costs and lost => "Earthquakes" then "and they" weird, cost should have has subject damage then should be singular with singular pronoun...
(B) damage, so as to cost the nation $70 billion in repair costs and lost => "Earthquakes" then "so as to" => meaning problem
(C) damage and thus cost the nation $70 billion in repair costs and lost => "cost" refer to "damage" as a subject but separation with "and thus" is wrong and weird
(D) damage that costs the nation $70 billion in lost repair costs and => meaning is clear, subject is clearly identified for "costs" but let's see the other answer
(E) damage, which thus costs the nation $70 billion in lost repair costs and => meaning is clear, subject is clearly identified for "costs" and I tend to prefer the use of which here rather than that. I will go with this one.
Answer E