Environment variables in Python provide a way to configure applications in a non-hardcoded manner, enabling modification of application behavior without changing the actual code. They are especially important when parameterizing data pipelines in a production environment, allowing sensitive information like database credentials or API keys to be stored outside the codebase, enhancing security and making the code more portable and easier to manage. Python's built-in `os` module provides an interface to interact with the underlying operating system, including a dictionary-like object called `os.environ`, which allows access, modification, or creation of environment variables in a Python program. Environment variables are accessible within the same process but not between processes, so they require setting outside of Python for persistence across different sessions or processes. They can be used for configuration data that varies between deployment environments and sensitive data that should not be stored directly in the code. Using environment variables fosters consistency by keeping development and production environments consistent and helps prevent bugs by ensuring that application settings remain consistent across all environments.