It’s not about the negative externality of energy production, but the negative externality of Bitcoin mining. Using significant percentage of the available renewable energy, driving up prices and forcing other industries that are far less optional to resort to non-renewable energy. And probably even preventing other net-good uses of cheap energy from ever coming into existence.

Yeah exactly. Another example would be the impact on GPU prices: mining almost certainly plays a role in making GPUs less accessible, which raises the cost of ML for example. There's probably innovations which would affect the world in a positive way which we don't have right now because of the barrier to entry to ML research created by high GPU prices.