This isn't a subsidy, it's hydro power; which is limited, but cheap to produce. If the bitcoin miners drive the price up without providing many jobs, it may incentivize the actual employers that were attracted by the low price to leave for other areas. It's a net negative for the community.
To benefit from cheaper electricity, you have to use it, and traditionally that's been through employing people to operate machines. If the companies got a cash subsidy instead, they would probably pocket the cash without doing as much as they promised to do to get it.
Money is fungible. Whether they're saving it by having cheaper electricity or getting cut a check is irrelevant.
Energy-intensive industries that form part of the productive economy are exactly the industries that we want to use that power. We want aluminium smelters and chemical manufacturers to be sucking up that cheap, clean energy. It's an efficient use of resources.
Churning out gigajoules of waste heat to process kilobytes worth of transactions is not an efficient use of resources. It's a colossal waste that has done nothing useful except enrich a bunch of speculators.
It is not the job of local municipalities to decide whether Bitcoin transactions are worth the cost of electricity. How could they possibly have the expertise to decide questions like that?
That's wrong (and also kinda dogmatic). Money is fungible with itself, but it's not fungible with electricity. If a business gets a cash subsidy, they have all kinds of options to subvert the purposes that subsidy [1], but still collect the money. With cheaper electricity, the incentive is tied far more tightly to the actual activity of operations.
[1] which are to incentivize them to locate their operations in a particular place
No. What if they have operations in multiple locations? They could locate the bulk of their operations elsewhere, and only maintain the minimum presence in the jurisdiction of the local government to collect the subsidy.
With cheap electricity, they're incentivized to locate as much of their operations (that would benefit form the electricity price) as possible.
>>>>> Money is fungible. Whether they're saving it by having cheaper electricity or getting cut a check is irrelevant.
> Tie the subsidy to electricity consumption. This really isn't hard.
So you're conceding the point that there are important differences between "having cheaper electricity or getting cut a check," then? What you suggest is nearly indistinguishable from just having lower-priced electricity. The only difference is some extra paperwork and administration to get the lower price.
No.
> What you suggest is nearly indistinguishable from just having lower-priced electricity. The only difference is some extra paperwork and administration to get the lower price.
Nearly indistinguishable, except along the criteria in question. If you price electricity below market, you get free riders like the Bitcoin miners. They're certainly not the only ones either, just the biggest. If you instead subsidize the thing you actually want then you will get more of that thing, without the free rider problem. If you want to subsidize job creation, then do that, don't just have cheap electricity and then whine when people take you up on it.
The government is buying electricity from the region next door to make up for shortfalls, so I am confident they could sell their cheap electricity the other direction as well when they have an excess. Not selling that electricity at market prices and instead selling it at below market rates to companies because you think they benefit your community is a subsidy.
Heck, even if you couldn't sell the electricity to neighboring regions, you should still sell it at market rates and then distribute the resulting money in a more targeted way.
> If the companies got a cash subsidy instead, they would probably pocket the cash without doing as much as they promised to do to get it.
You don't have to hand them cash for nothing. You could give it as payroll tax breaks or a million other methods that are a lot more targeted than per-KW-hr. It's lunacy to think that power usage is even roughly proportional to the number of people employed pre-bitcoin. Businesses very tremendously in their power-usage-to-employee ratio.