Step 1: Know the law.
The Environment (Protection) Act, 1986 was passed after the Bhopal Gas Tragedy to protect the environment. Section 3 gives wide powers to the Central Government.
Step 2: Look at Section 3.
Section 3(1) lets the Central Government take any measure to protect and improve the environment.
Step 3: Look at the list in Section 3(2).
Section 3(2) gives specific powers like making standards, planning programmes, collecting information and doing research. Each power sits in its own sub-clause.
Step 4: Find the exact clause asked.
The question asks about Section 3(2)(ii). This clause covers collection and spreading of information about environmental pollution.
Step 5: Match the option.
Option C says "Collection and dissemination of information in respect of matters relating to environmental pollution". This matches the clause word for word.
Step 6: Rule out the rest.
Research, laying down standards and nationwide programmes are also powers, but they fall under other sub-clauses, not 3(2)(ii).
\[ \boxed{\text{Collection and dissemination of information in respect of matters relating to environmental pollution}} \]