This is an assumption question. The argument concludes that, as a result of taxes on newly built plants, companies will put more money into developing alternative energy sources. The underlying assumption is that the tax is substantial enough so that developing new technologies is a cheaper alternative to sticking with the newly built plants and paying the taxes. If you identify the assumption, you don't need to analyze each choice, as choice (E) neatly wraps up the link between the two sentences in the passage. (E) is the correct choice.