Developing economies are suffering to fulfill the sustainable environment’s commitments in fiscal imbalance. This study attempted to highlight the core issue of fiscal imbalance in developing economies and its impact on a sustainable environment. For this purpose, the study utilized generalized least squares (GLS) and quantile autoregressive distributive lag (QARDL) on a 19-year dataset (2000–2018) of the South Asian region. The results of GLS indicate that fiscal imbalance contributing positively to South Asia’s environmental degradation process. Here, energy consumption (due to dirty sources of energy) and energy intensity (due to inefficient energy conversion technology) are also sources of environmental degradation in this region. The results of QARDL confirm that economic and political fluctuations can be the long-run source of fiscal imbalance in this region, which ultimately slows down the process of the environmental Kuznets curve (EKC) theory and contributes positively to environmental degradation. Based on the empirical analysis, this study provides a comprehensive set of policy guidance for developing and developed economies for the smooth transition of sustainable environmental conditions in South Asia.

发展中经济体在财政失衡方面难以履行可持续环境的承诺。本研究试图强调发展中经济体财政失衡的核心问题及其对可持续环境的影响。为此，该研究在南亚地区的 19 年数据集（2000-2018）上使用了广义最小二乘法 (GLS) 和分位数自回归分布滞后 (QARDL)。GLS 的结果表明，财政失衡对南亚的环境退化过程产生了积极的影响。在这里，能源消耗（由于肮脏的能源）和能源强度（由于低效的能源转换技术）也是该地区环境恶化的根源。QARDL 的结果证实，经济和政治波动可能是该地区财政失衡的长期根源，最终减缓了环境库兹涅茨曲线 (EKC) 理论的进程，并对环境退化做出了积极贡献。基于实证分析，本研究为发展中和发达经济体为南亚可持续环境条件的平稳过渡提供了一套全面的政策指导。