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+# Environment Variable Specification for Context and Baggage Propagation
+
+This is a proposal to add Environment Variables to the OpenTelemetry
+specification as carriers for context and baggage propagation between
+processes.
+
+## Table of Contents
+
+* [Motivation](#motivation)
+* [Design](#design)
+  * [Example Context](#example-context)
+    * [Distributed Tracing in OpenTofu Prototype Example](#distributed-tracing-in-opentofu-prototype-example)
+* [Core Specification Changes](#core-specification-changes)
+  * [UNIX](#unix-limitations)
+  * [Windows](#windows-limitations)
+  * [Allowed Characters](#allowed-characters)
+* [Trade-offs and Mitigations](#trade-offs-and-mitigations)
+  * [Case-sensitivity](#case-sensitivity)
+  * [Security](#security)
+* [Prior Art and Alternatives](#prior-art-and-alternatives)
+  * [Alternatives and why they were not chosen](#alternatives-and-why-they-were-not-chosen)
+* [Open Questions](#open-questions)
+* [Future Possibilities](#future-possibilities)
+
+## Motivation
+
+The motivation for defining the specification for context and baggage
+propagation by using environment variables as carriers stems from the long open
+[issue #740][issue-740] on the OpenTelemetry Specification repository. This
+issue has been open for such a long time that multiple implementations now
+exist using `TRACEPARENT` and `TRACESTATE` environment variables.
+
+[Issue #740][issue-740] identifies several use cases in systems that do not
+communicate across bounds by leveraging network communications such as:
+
+* ETL
+* Batch
+* CI/CD systems
+
+Adding arbitrary [Text Map propagation][tmp] through environment variable carries into
+the OpenTelemetry Specification will enable distributed tracing within the
+above listed systems.
+
+There has already been a significant amount of [Prior Art](#prior-art) built
+within the industry and **within OpenTelemetry** to accomplish the immediate needs,
+however, OpenTelemetry at this time does not define the specification for this
+form of propagation.
+
+Notably, as we define semantic conventions within the [CI/CD Working Group][cicd-wg],
+we'll need the specification defined for the industry to be able to adopt
+native tracing within CI/CD systems.
+
+[cicd-wg]: https://github.com/open-telemetry/community/blob/main/projects/ci-cd.md
+[issue-740]: https://github.com/open-telemetry/opentelemetry-specification/issues/740#issue-665588273
+[tmp]: https://opentelemetry.io/docs/specs/otel/context/api-propagators/#textmap-propagator
+
+## Design
+
+To propagate context and baggage between parent, sibling, and child processes
+in systems where network communication does not occur between processes, a
+specification using key-value pairs injected into the environment can be read
+and produced by an arbitrary TextMapPropagator.
+
+### Example Context
+
+Consider the following diagram in the context of process forking:
+
+> Note: The diagram is simply an example and simplification of process forking.
+> There are other ways to spawn processes which are more performant like
+> exec().
+
+![Environment Variable Context Propagation](./img/0258-env-context-parent-child-process.png)
+
+In the above diagram, a parent process is forked to spawn a child process,
+inheriting the environment variables from the original parent. The environment
+variables defined here, `TRACEPARENT`, `TRACESTATE`, and `BAGGAGE` are used to
+propagate context to the child process such that it can be tied to the parent.
+Without `TRACEPARENT`, a tracing backend would not be able to connect the child
+process spans to the parent span, forming an end-to-end trace.
+
+> Note: While the below exclusively follows the W3C Specification translated
+> into environment variables, this proposal is not exclusive to W3C and is
+> instead focused on the mechanism of Text Map Propagation with a potential set
+> of well-known environment variable names. See the [Core Specification
+> Changes](#core-specification-changes) section for more information.
+
+Given the above example aligning with the W3C Specification, the following is
+a contextual mapping of environment variables to headers defined by W3C.
+
+The `traceparent` (lowercase) header is defined in the [W3C
+Trace-Context][w3c-parent] specification and includes the following valid
+fields:
+
+* `version`
+* `trace-id`
+* `parent-id`
+* `trace-flags`
+
+This could be set in the environment as follows:
+
+```bash
+export TRACEPARENT=00-4bf92f3577b34da6a3ce929d0e0e4736-00f067aa0ba902b7-01
+```
+
+> Note: The value of TRACEPARENT is a combination of the above field values as
+> unsigned integer values serialized as ASCII strings, delimited by `-`.
+
+The `tracestate` (lowercase) header is defined in [W3C
+Trace-State][w3c-state] and can include any opaque value in a key-value pair
+structure. Its goal is to provide additional vendor-specific trace information.
+
+The `baggage` (lowercase) header is defined in [W3C Baggage][w3c-bag]
+and is a set of key-value pairs to propagate context between signals. In
+OpenTelemetry, baggage is propagated through the [Baggage API][bag-api].
+
+[w3c-parent]: https://www.w3.org/TR/trace-context-2/#traceparent-header-field-values
+[w3c-state]: https://www.w3.org/TR/trace-context-2/#tracestate-header
+[w3c-bag]: https://www.w3.org/TR/baggage/#baggage-http-header-format
+
+#### Distributed Tracing in OpenTofu Prototype Example
+
+Consider this real world example OpenTofu Controller Deployment.
+
+![OpenTofu Run](./img/0258-env-context-opentofu-tracing.png)
+
+In this model, the OpenTofu Controller is the start of the trace, containing
+the actual trace_id and generating the root span. The OpenTofu controller
+deploys a runner which has its own environment and processes to run OpenTofu
+commands. If one was to trace these processes without a carrier mechanism, then
+they would all show up as unrelated root spans in separate traces. However, by
+leveraging environment variables as carriers, each span is able to be tied back
+to the root span, creating a single trace as shown in the image of a real
+OpenTofu trace below.
+
+![OpenTofu Trace](./img/0258-env-context-opentofu-trace.png)
+
+Additionally, the `init` span is able to pass baggage to the `plan` and `apply`
+spans. One example of this is module version and repository information. This
+information is only determined and known during the `init` process. Subsequent
+processes only know about the module by name. With `BAGGAGE` the rest of the
+processes are able to understand a key piece of information which allows
+errors to be tied back to original module version and source code.
+
+Defining the specification for Environment Variables as carriers will have a
+wide impact to the industry in enabling better observability to systems outside
+of the normal HTTP microservice architecture.
+
+[w3c-bag]: https://www.w3.org/TR/baggage/#header-name
+[bag-api]: https://opentelemetry.io/docs/specs/otel/baggage/api/
+
+The above prototype example came from the resources mentioned in [this
+comment][otcom] on the [OpenTofu Tracing RFC][otrfc].
+
+[otcom]: https://github.com/opentofu/opentofu/pull/2028#issuecomment-2411588695
+[otrfc]: https://github.com/opentofu/opentofu/pull/2028
+
+## Core Specification Changes
+
+The OpenTelemetry Specification should be updated with the definitions for
+extending context propagation into the environment through Text Map
+propagators.
+
+This update should include:
+
+* A common set of environment variables like `TRACEPARENT`, `TRACESTATE`, and
+  `BAGGAGE` that can be used to propagate context between processes. These
+  environment variables names should be overridable for legacy support reasons
+  (like using B3), but the default standard should align with the W3C
+  specification.
+* A specification for allowed environment names and values due to operating
+  system limitations.
+* A specification for how implementers can inject and extract context from the
+  environment through a TextMapPropagator.
+* A specification for how processes should update environment variables before
+  spawning new processes.
+
+Defining the specification for Environment Variables as carriers for context
+will enable SDK's and other tools to implement getters and setters of context
+in a standard, observable way. Therefore, current OpenTelemetry language
+maintainers will need to develop language specific implementations that adhere
+to the specification.
+
+Two implementations already exist within OpenTelemetry for environment
+variables through the TextMap Propagator:
+
+* [Python SDK][python-env] - This implementation uses environment dictionary as
+  the carrier in Python for invoking process to invoked process context
+  propagation. This pull request does not appear to have been merged.
+* [Swift SDK][swift-env] - This implementation uses `TRACEPARENT` and
+  `TRACESTATE` environment variables alongside the W3C Propagator to inject and
+  extract context.
+
+Due to programming conventions, operating system limitations, prior art, and
+information below, it is recommended to leverage upper-cased environment
+variables for the carrier that align with context propagator specifications.
+
+[python-env]: https://github.com/Div95/opentelemetry-python/tree/feature/env_propagator/propagator/opentelemetry-propagator-env
+[swift-env]: https://github.com/open-telemetry/opentelemetry-swift/blob/main/Sources/OpenTelemetrySdk/Trace/Propagation/EnvironmentContextPropagator.swift
+
+### UNIX Limitations
+
+UNIX system utilities use upper-case for environment variables and lower-case
+are reserved for applications. Using upper-case will prevent conflicts with
+internal application variables.
+
+Environment variable names used by the utilities in the Shell and Utilities
+(XCU) specification consist solely of upper-case letters, digits and the "_"
+(underscore) from the characters defined in Portable Character Set. Other
+characters may be permitted by an implementation; applications must tolerate
+the presence of such names. Upper-case and lower-case letters retain their
+unique identities and are not folded together. The name space of environment
+variable names containing lower-case letters is reserved for applications.
+Applications can define any environment variables with names from this name
+space without modifying the behaviour of the standard utilities.
+
+Source: [The Open Group, The Single UNIX® Specification, Version 2, Environment Variables](https://pubs.opengroup.org/onlinepubs/7908799/xbd/envvar.html)
+
+### Windows Limitations
+
+Windows is case-insensitive with environment variables. Despite this, the
+recommendation is to use upper-case names across OS.
+
+Some languages already do this. This [CPython issue][cpython] discusses how
+Python automatically upper-cases environment variables. The issue was merged and
+this [documentation][cpython-doc] was added to clarify the behavior.
+
+[cpython]: https://github.com/python/cpython/issues/101754
+[cpython-doc]: https://docs.python.org/3/library/os.html#os.environ
+
+### Allowed characters
+
+To ensure compatibility, specification for Environment Variables SHOULD adhere
+to the current specification for `TextMapPropagator` where key/value pairs MUST
+only consist of US-ASCII characters that make up valid HTTP header fields as
+per RFC 7230.
+
+Environment variable keys, SHOULD NOT conflict with common known environment
+variables like those described in [IEEE Std 1003.1-2017][std1003].
+
+One key note is that windows disallows the use of the `=` character in
+environment variable names. See [MS Env Vars][ms-env] for more information.
+
+There is also a limit on how many characters an environment variable can
+support which is 32,767 characters.
+
+[std1003]: https://pubs.opengroup.org/onlinepubs/9799919799/
+
+[ms-env]: https://learn.microsoft.com/en-us/windows/win32/procthread/environment-variables
+
+## Trade-offs and Mitigations
+
+### Case-sensitivity
+
+On Windows, because environment variable keys are case insensitive, there is a
+chance that automatically instrumented context propagation variables could
+conflict with existing application environment variables. It will be important
+to denote this behavior and document how languages mitigate this issue.
+
+### Security
+
+Do not put sensitive information in environment variables. Due to the nature of
+environment variables, an attacker with the right access could obtain
+information they should not be privy too. Additionally, the integrity of the
+environment variables could be compromised.
+
+## Prior Art and Alternatives
+
+There are many users of `TRACEPARENT` and/or `TRACESTATE` environment variables
+mentioned in [opentelemetry-specification #740](https://github.com/open-telemetry/opentelemetry-specification/issues/740):
+
+* [Jenkins OpenTelemetry Plugin](https://github.com/jenkinsci/opentelemetry-plugin)
+* [otel-cli generic wrapper](https://github.com/equinix-labs/otel-cli)
+* [Maven OpenTelemetry Extension](https://github.com/cyrille-leclerc/opentelemetry-maven-extension)
+* [Ansible OpenTelemetry Plugin](https://github.com/ansible-collections/community.general/pull/3091)
+* [go-test-trace](https://github.com/rakyll/go-test-trace/commit/22493612be320e0a01c174efe9b2252924f6dda9)
+* [Concourse CI](https://github.com/concourse/docs/pull/462)
+* [BuildKite agent](https://github.com/buildkite/agent/pull/1548)
+* [pytest](https://github.com/chrisguidry/pytest-opentelemetry/issues/20)
+* [Kubernetes test-infra Prow](https://github.com/kubernetes/test-infra/issues/30010)
+* [hotel-california](https://github.com/parsonsmatt/hotel-california/issues/3)
+
+Additionally, there was a prototype implementation for environment variables as
+context carriers written in the [Python SDK][python-env].
+
+[python-env]: https://github.com/open-telemetry/opentelemetry-specification/issues/740#issuecomment-919657003
+
+## Alternatives and why they were not chosen
+
+### Using a file for the carrier
+
+Using a JSON file that is stored on the filesystem and referenced through an
+environment variable would eliminate the need to workaround case-insensitivity
+issues on Windows, however it would introduce a number of issues:
+
+1. Would introduce an out-of-band file that would need to be created and
+   reliably cleaned up.
+2. Managing permissions on the file might be non-trivial in some circumstances
+   (for example, if `sudo` is used).
+3. This would deviate from significant prior art that currently uses
+   environment variables.
+
+## Open questions
+
+The author has no open questions at this point.
+
+## Future possibilities
+
+1. Enabling distributed tracing in systems that do not communicate over network
+   protocols that allow trace context being propagated through headers,
+   metadata, or other means.
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