It's more of an observation on how markets tend to work in general.
Unless we're only talking about Iceland or similar countries, which are not connected to any continental grid and have a surplus of cheap/free energy they have no where to put, increased demand for electricity will lead to increased production. This demand might be fulfilled by building new powerplants using renewable sources (since currently that's cheaper than fossil or nuclear. However as long as these new sources are connected to a grid which still has non-renewable power plants mining bitcoin will produce as much CO2 as using a washing machine, smelting aluminum or driving a tesla per kWh.
Now if (assuming everything else stays constant) for some reason all bitcoin mining stopped the decrease in demand would lead to decrease in production from more expensive (possibly due to regulatory overhead and/or subsidies to renewables) more fossil-fuel based energy sources
Whether it can be used for other production or not, if mining runs on renewables, that's just it. How do you deliver energy for other production? Just send it across the country?
