UnicodeDecodeError: 'ascii' codec can't decode byte 0xc0

Problem with operation

C:\Python27\Scripts> pip install twisted

under Windows 2016 Enterprice RUS

Collecting twisted
  Using cached Twisted-17.1.0.tar.bz2
...
    copying src\twisted\internet\test\fake_CAs\thing1.pem -> build\lib.win32-2.7\twisted\internet\test\fake_CAs
    copying src\twisted\internet\test\fake_CAs\thing2-duplicate.pem -> build\lib.win32-2.7\twisted\internet\test\fake_CAs
    copying src\twisted\internet\test\fake_CAs\thing2.pem -> build\lib.win32-2.7\twisted\internet\test\fake_CAs
    copying src\twisted\mail\test\rfc822.message -> build\lib.win32-2.7\twisted\mail\test
    copying src\twisted\words\im\instancemessenger.glade -> build\lib.win32-2.7\twisted\words\im
    copying src\twisted\words\xish\xpathparser.g -> build\lib.win32-2.7\twisted\words\xish
    running build_ext
    Traceback (most recent call last):
      File "", line 1, in 
      File "c:\users\800f~1.win\appdata\local\temp\2\pip-build-ydqiir\twisted\setup.py", line 21, in 
        setuptools.setup(**_setup["getSetupArgs"]())
      File "c:\python27\lib\distutils\core.py", line 151, in setup
        dist.run_commands()
      File "c:\python27\lib\distutils\dist.py", line 953, in run_commands
        self.run_command(cmd)
      File "c:\python27\lib\distutils\dist.py", line 972, in run_command
        cmd_obj.run()
      File "c:\python27\lib\site-packages\setuptools\command\install.py", line 61, in run
        return orig.install.run(self)
      File "c:\python27\lib\distutils\command\install.py", line 563, in run
        self.run_command('build')
      File "c:\python27\lib\distutils\cmd.py", line 326, in run_command
        self.distribution.run_command(command)
      File "c:\python27\lib\distutils\dist.py", line 972, in run_command
        cmd_obj.run()
      File "c:\python27\lib\distutils\command\build.py", line 127, in run
        self.run_command(cmd_name)
      File "c:\python27\lib\distutils\cmd.py", line 326, in run_command
        self.distribution.run_command(command)
      File "c:\python27\lib\distutils\dist.py", line 972, in run_command
        cmd_obj.run()
      File "c:\python27\lib\distutils\command\build_ext.py", line 340, in run
        self.build_extensions()
      File "", line 311, in build_extensions
      File "", line 300, in prepare_extensions
      File "", line 196, in 
      File "", line 344, in _check_header
      File "", line 330, in _compile_helper
      File "c:\python27\lib\distutils\msvc9compiler.py", line 473, in compile
        self.initialize()
      File "c:\python27\lib\distutils\msvc9compiler.py", line 383, in initialize
        vc_env = query_vcvarsall(VERSION, plat_spec)
      File "c:\python27\lib\site-packages\setuptools\msvc.py", line 136, in msvc9_query_vcvarsall
        return EnvironmentInfo(arch, ver).return_env()
      File "c:\python27\lib\site-packages\setuptools\msvc.py", line 1125, in return_env
        exists),
      File "c:\python27\lib\site-packages\setuptools\msvc.py", line 1148, in _build_paths
        return os.pathsep.join(unique_paths)
    UnicodeDecodeError: 'ascii' codec can't decode byte 0xc0 in position 9: ordinal not in range(128)
    
    ----------------------------------------

Start by reproducing pip install twisted on the reported Windows and Python 2.7 environment. Trace the failure from setuptools/msvc.py through distutils/msvc9compiler.py, focusing on the _build_paths call in the traceback. Done means the installation no longer raises this UnicodeDecodeError in the reported environment.