Rails has three default environments: DEVELOPMENT, TEST, PRODUCTION.
You can create your own environment, which is a good solution for what you're asking.
You can choose your own environment name, create your own environment settings, etc.:
To do this, create an environment file:
config/environments/foo.rb
And you'll likely want to add a database connection by editing this file:
I suggest not using the name LOCAL because it's a misnomer.
Some teams choose explicit names, such as DEVELOPMENT_WITH_ERROR_NOTIFICATIONS.
Some teams choose to keep DEVELOPMENT for the typical local developer machines, because this matches the typical Rails documentation; the teams name the development server environment something meaningful such as QA, DEMO, ALPHA, INTEGRATION, etc.