[ephbit]

The carbon fee would lower and possibly sometimes completely remove the incentive to mine Bitcoin on a grid that is coincidentally emitting CO2, when the current electricity generation mix has a large share of fossil generation.

As most (if not all) uses of electricity, Bitcoin mining is sensitive to the electricity price. Introducing a a carbon tax / carbon dividend, doesn't magically make any particular use of electricity economically unviable all of the time. It just pushes the cost equilibria to different values.