The correct answer is C. CO2 laser.
The patient has actinic cheilitis. Actinic cheilitis is a pre-malignant condition and presents with erythema, scaling, erosions, and fissures of the lip. The CO2 laser targets water as a chromophore. This ablative laser represents a treatment option for this condition.
Physical treatments for actinic cheilitis include cryotherapy, electrocautery, vermillionectomy, and laser ablation with a carbon dioxide laser or an erbium:YAG laser.
Pulsed dye laser (PDL): PDL is useful in the treatment of vascular abnormalities and skin conditions such as port-wine stains, hemangiomas, telangiectasis, and poikiloderma.
Nd-YAG laser can be used to treat the following skin disorders: vascular lesions, pigmented lesions, hair removal, wrinkles (photoaging), onychomycosis, and tattoo removal.
Diode laser (810 nm) can be used to perform laser hair removal.
References: Whitaker DC. Microscopically proven cure of actinic cheilitis by CO2 laser. Lasers Surg Med. 1987;7(6):520-523. doi:10.1002/lsm.1900070615. Zelickson BD, Roenigk RK. Actinic cheilitis. Treatment with the carbon dioxide laser. Cancer. 1990;65(6):1307-1311. doi:10.1002/1097-0142(19900315)65:6<1307::aid-cncr2820650609>3.0.co;2-z