Environment variables and shell variables (parameters)
are set in the .profile and ENV
files. (The ENV file is often,
but not always, .kshrc.)
These variables create part of the environment
in which you work, such as your prompt string (PS1).
Environment variables are shell parameters
that are global and used by your shell to
create a special environment for subshells and any commands you
may invoke. This environment is active until you logoff. These global
(or exported) environment variables can be
seen and used by subshells and other subprocesses. Shell
variables are shell parameters that are local to your
login shell and not passed on to any subprocesses or subshells.