Carbon dioxide significantly impacts the pH of water by forming carbonic acid when it dissolves. This process occurs when carbon dioxide comes into contact with water; it reacts to create carbonic acid (H2CO3), which then dissociates to release hydrogen ions (H+). The increase in hydrogen ions lowers the pH, making the water more acidic. Therefore, when carbon dioxide is present in water, the overall effect is a reduction in pH, which aligns with the correct choice being that it reduces pH.
Other options suggesting that carbon dioxide raises pH, has no effect, or neutralizes pH do not recognize the acid-forming nature of carbon dioxide in aqueous solutions and its role in creating a more acidic environment. Understanding this reaction is essential for managing water treatment processes, especially in balancing alkalinity and controlling corrosivity.