Help with observer configuration

I’m setting up acts_as_authenticated but want to use it for now in
development mode.

Anyway in the configuration it says to add to environment.rb under do |config|
config.active_record.observers = :user_observer

All I want to know is should I be putting this in
environments/development.rb to make it work using localhost. Mail
will be going out using remote SMTP server.
Or just leave it in environment.rb ?