The correct answer is option 1, the Kiel Canal connects the Baltic Sea and North Sea.

Option 2, which suggests that the Kiel Canal connects the Red Sea and Mediterranean Sea, is incorrect. The Red Sea and Mediterranean Sea are connected by the Suez Canal in Egypt.

Option 3, stating that the Kiel Canal connects the Caribbean Sea and Pacific Sea, is also incorrect. The Caribbean Sea and Pacific Ocean are separated by the Central American landmass and are connected by the Panama Canal.

Option 4, suggesting that the Kiel Canal connects the Atlantic Ocean and Pacific Ocean, is not correct. The Atlantic Ocean and Pacific Ocean are connected by the Panama Canal and the Drake Passage at the southern tip of South America, not through the Kiel Canal.

In conclusion, the Kiel Canal is specifically located in Germany and serves as a major shipping route between the Baltic Sea and North Sea, option 1 being the correct answer.