GMAT Critical Reasoning (CR) | Which of the following, if true, provides evidence that most

My 2 cents.
According to a widely heldeconomic hypothesis, imposing strict environmental regulations reduces economic growth.
General Fact-1: Strict/High ER --> Low EG [C&E]

This hypothesis is undermined by the fact that the states with the strictest environmental regulations also have the highest economicgrowth.
Contradicting Fact-2: Strictest ER -- Highest EG [mentions that 2 r present together]

This factdoes not show that environmental regulations promote growth , however, since______.
Conclusion: SER !-> HEG. Why??
We can answer that by identifying an alternate factor that affect EG , during the strict ER period. Just bec 2 events r present doesn't mean that they r related.