First of all, I do not really want (cannot) get rid of all environment variables, but we should not need anything more than PATH, LD_LIBRARY_PATH, PYTHONPATH and ROOT_INCLUDE_PATH. What want to drop is backdoor access to source/private files via $WHATEVERROOT variables, with the grand plan that our runtime does not require to install the sources of the project.
Tests can still use files in the source tree and relative paths are a good way.
Resources like application-option-defaults.yaml, that have to be accessible at runtime, have to be installed, for example as part of the Python package that needs them (there might be something to to with the zipping of Python directories at some point).
For the specific case of application-option-defaults.yaml, I would suggest to put the default configuration dictionary directly as a Python dictionary in application.py or in a parallel module.