GMAT Sentence Correction (SC) | Re: While all states face similar industrial waste problems, the

any expert can help me solve the SVA problem

IMO, I view "the predominant industries and the regulatory environment " as a singular noun, because it is a group , "of each state" is modifier, so the subject is singular noun, that's why I pick up D rather than E.

please point out my fault

thanks in advance
have a nice day
>_~