Economist: Monterrey Capital, which constantly seeks profitable investment opportunities, has been buying and converting grasslands for corn ethanol bioenergy production, although the process of tilling new soil produces a one-off release of greenhouse gases that can take decades or centuries of ethanol corn production to offset. Still, the company has not gone into building fossil fuel power plants, even though greater profits can be made from fossil fuel energy. Thus, some environmentalists conclude that Monterrey has not acted wholly out of economic self-interest. However, these environmentalists are probably wrong. The initial investment required for a successful fossil fuel power plant operation is larger than that needed for corn ethanol production. Furthermore, there are new government regulations that increase taxes on fossil fuel power plants while providing subsidies for ethanol bioenergy production.
In the economist's argument, the two boldfaced portions play which of the following roles?