If the energy required to mine BTC costs more than the value generated, miners stop mining. Tax the externalities properly and there is no environmental problem here.
The only real hope is technological change, for example battery technology being more economic than gas powered vehicles. The current implementation of Bitcoin is a technology that takes us in the other direction.
If the people who always say "tax the externalities" were ever actually leading the political charge to do so, I'd be much more sympathetic. Instead it always seems to be a gas lighting move in bad faith, where on one hand it's "easy problem, it's all externalities!" and with the other hand they're the people fighting tooth and nail against the environmental regulations and taxes we so desperately need.
“We made this thing which consumes about as much energy as Serbia on an international scale, and is very likely in the running for the most expensive computation on the planet. It’s designed incredibly inefficiently to brute force through SHA2 in 30MW+ space heaters around the world because we believe centralization is Evil, but now that what it makes is valuable, we can deflect criticism of its energy consumption to the pricing of the electricity markets. Raise the price of energy to stop us. What’s that? A lot of people already can’t afford electricity?”
It’s OK to admit Bitcoin is inefficient.
Free markets don't exist in a vacuum. Taxes pay for all the institutions that enable free markets -- including but not limited to law, enforcement of contracts, and especially (hopefully) the proper accounting of externalities.
https://i.imgur.com/jhQi1yK.png
Right now, the miners have an incentive to mine more than is socially optimal because the impact on the environment (the externality) doesn't affect their profits. If you add a tax such that the cost to mine bitcoins matches the cost to society, the market will restructure itself to produce the socially optimal amount.