GitHub Actions environment variables allow developers to build dynamic workflows by changing the behavior of the workflow based on user-defined variables or default GitHub variables. There are three scopes available for environment variables: workflow, job, and step, which determine the scope of the variable. Environment variables can be defined at each scope using a specific syntax. Contexts are used to access environment variables across different virtual machines. Default variables and GitHub secrets are also available for use in workflows. GitHub secrets encrypt sensitive data, such as passwords and API keys, making them safe to use in workflows. By using these variables and contexts, developers can create secure and dynamic workflows that adapt to changing requirements.