Variables vs Functions in template files

Can someone explain what is the difference in scope here

If in my functions.php I had this

$blue = 'blue';
function red() {
  echo 'red';
}

then in sidebar.php

<?php echo $blue; ?>
  <?php red(); ?>

If I included the sidebar with get_sidebar(), which involves a “require”, the function red() is available and works, but the variable blue does not exist.

My question is, why is the function red() available, but the variable $blue, not available? (unless I make $blue a global).

Thanks in advance!