Is there any way to set environment variables in Visual Studio Code?

Assuming you mean for a debugging session(?) then you can include a env property in your launch configuration.

If you open the .vscode/launch.json file in your workspace or select Debug > Open Configurations then you should see a set of launch configurations for debugging your code. You can then add to it an env property with a dictionary of string:string.

Here is an example for an ASP.NET Core app from their standard web template setting the ASPNETCORE_ENVIRONMENT to Development :

{
  "version": "0.2.0",
  "configurations": [
    {
      "name": ".NET Core Launch (web)",
      "type": "coreclr",
      "request": "launch",
      "preLaunchTask": "build",
      // If you have changed target frameworks, make sure to update the program path.
      "program": "${workspaceFolder}/bin/Debug/netcoreapp2.0/vscode-env.dll",
      "args": [],
      "cwd": "${workspaceFolder}",
      "stopAtEntry": false,
      "internalConsoleOptions": "openOnSessionStart",
      "launchBrowser": {
        "enabled": true,
        "args": "${auto-detect-url}",
        "windows": {
          "command": "cmd.exe",
          "args": "/C start ${auto-detect-url}"
        },
        "osx": {
          "command": "open"
        },
        "linux": {
          "command": "xdg-open"
        }
      },
      "env": {
        "ASPNETCORE_ENVIRONMENT": "Development"
      },
      "sourceFileMap": {
        "/Views": "${workspaceFolder}/Views"
      }
    },
    {
      "name": ".NET Core Attach",
      "type": "coreclr",
      "request": "attach",
      "processId": "${command:pickProcess}"
    }
  ]
}