The env option runs the given command under that environment, it doesn't change the environment permanently.
So for example, you might be on staging environment, for whatever reason you want to run a command under the local environment you could do php artisan migrate --env=local
and it would attempt to migrate using the config of the local environment.
If you're looking to change environment permanently you need to do so under bootstrap/start.php
http://laravel.com/docs/4.2/configuration#environment-configuration
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