diff --git a/README.md b/README.md
index 16d9e36..b40fbe0 100644
--- a/README.md
+++ b/README.md
@@ -22,9 +22,8 @@ Wiaas implementation based on wordpress [woocommerce](https://woocommerce.com/)
  * `MYSQL_DATABASE` - Wordpress database name
  * `MYSQL_USER` - Wordpress database user
  * `MYSQL_PASSWORD` - Wordpress database password
- * `MYSQL_HOST` - Wordpress database host (will be `db` for docker)
- * `WP_ENV` - Set to environment (`local`, `development`, `production`)
  * `API_URL` - Full URL to WordPress home (http://localhost:8081 if you are testing locally)
+ * `WP_ENV` - Set to environment (`development`, `staging`, `production`)
  * `WP_AUTH_KEY`, `WP_SECURE_AUTH_KEY`, `WP_LOGGED_IN_KEY`, `WP_NONCE_KEY`, `WP_AUTH_SALT`, `WP_SECURE_AUTH_SALT`, `WP_LOGGED_IN_SALT`, `WP_NONCE_SALT`, `WP_JWT_AUTH_SECRET_KEY`
     
 3) Execute in the root of the project :
@@ -53,14 +52,16 @@ Frontend is running on http://localhost:8080 and backend on http://localhost:808
 
 1) Environment variables
 
-For handling environment variables during local development we use [dotenv](https://github.com/vlucas/phpdotenv) library which will load all variables from `local.env` file
-if such file is present. These variables will then be accessible inside wordpress.
 
-    cp environment.env local.env
+For handling wordpress environment variables during local development we use [dotenv](https://github.com/vlucas/phpdotenv) library
+which enables loading variables  from `.env` file.
+
+If you wish to keep your docker and development setup different then generate `development.env` file which will then
+be loaded by dotenv insted of default `.env` file.
+
+    cp environment.env development.env
    
-Update `local.env` with your local environment variables.
-Remember to uncomment env variables needed for local wordpress development like WP_HOME and WP_DB_HOST.
-(important: set WP_ENV to local only for local coding environment, since it will activate script debug, wordpress debug and save query options).
+Update `development.env` with your local environment variables overrides.
 
 2) Apache
 
diff --git a/backend.dockerfile b/backend.dockerfile
index 117b1e0..177094a 100644
--- a/backend.dockerfile
+++ b/backend.dockerfile
@@ -19,6 +19,7 @@ ARG WP_JWT_AUTH_SECRET_KEY
 
 ENV WP_ENV ${WP_ENV}
 ENV WP_HOME ${API_URL}
+ENV WP_DB_HOST db
 
 ENV MYSQL_DATABASE ${MYSQL_DATABASE}
 ENV MYSQL_USER ${MYSQL_USER}
diff --git a/backend/config/application.php b/backend/config/application.php
index 53daba9..e12625e 100644
--- a/backend/config/application.php
+++ b/backend/config/application.php
@@ -15,7 +15,7 @@ Env::init();
  * Set up our global environment constant and load its config first
  * Default: development
  */
-define('WP_ENV', env('WP_ENV') ?: 'local');
+define('WP_ENV', env('WP_ENV') ?: 'development');
 
 $env_config = __DIR__ . '/environments/' . WP_ENV . '.php';
 
@@ -26,7 +26,7 @@ if (file_exists($env_config)) {
 /**
  * URLs
  */
-define('WP_HOME', env('WP_HOME'));
+define('WP_HOME', env('WP_HOME') ?: 'http://localhost');
 define('WP_SITEURL', WP_HOME . '/wp');
 
 /**
@@ -43,7 +43,7 @@ define('VP_PROJECT_ROOT', $webroot_dir . '/wp/');
 define('DB_NAME', env('MYSQL_DATABASE'));
 define('DB_USER', env('MYSQL_USER'));
 define('DB_PASSWORD', env('MYSQL_PASSWORD'));
-define('DB_HOST', env('WP_DB_HOST') ?: 'db');
+define('DB_HOST', env('WP_DB_HOST') ?: 'localhost');
 define('DB_CHARSET', 'utf8mb4');
 define('DB_COLLATE', '');
 $table_prefix = env('DB_PREFIX') ?: 'wp_';
diff --git a/backend/config/environments/development.php b/backend/config/environments/development.php
index 528be4a..5dd04a1 100644
--- a/backend/config/environments/development.php
+++ b/backend/config/environments/development.php
@@ -1,7 +1,25 @@
 <?php
 /** Development */
-ini_set('display_errors', 0);
-define('WP_DEBUG_DISPLAY', false);
-define('SCRIPT_DEBUG', false);
-/** Disable all file modifications including updates and update notifications */
-define('DISALLOW_FILE_MODS', true);
+define('SAVEQUERIES', true);
+define('WP_DEBUG', true);
+define('SCRIPT_DEBUG', true);
+
+/**
+ * Use Dotenv to set required environment variables and load .local.env file
+ */
+
+$dotenv_dir = dirname(dirname(dirname(__DIR__)));
+
+$env_file_name = null;
+
+if (file_exists($dotenv_dir . '/development.env')) {
+    $env_file_name = 'development.env';
+} else if(file_exists($dotenv_dir . '/.env')) {
+    $env_file_name = '.env';
+}
+
+if (isset($env_file_name)) {
+    $dotenv = new Dotenv\Dotenv($dotenv_dir, $env_file_name);
+	$dotenv->load();
+	$dotenv->required(['MYSQL_DATABASE', 'MYSQL_USER', 'MYSQL_PASSWORD']);
+}
\ No newline at end of file
diff --git a/backend/config/environments/local.php b/backend/config/environments/local.php
deleted file mode 100644
index 3f10e20..0000000
--- a/backend/config/environments/local.php
+++ /dev/null
@@ -1,16 +0,0 @@
-<?php
-/** Development */
-define('SAVEQUERIES', true);
-define('WP_DEBUG', true);
-define('SCRIPT_DEBUG', true);
-
-/**
- * Use Dotenv to set required environment variables and load .env file in root if on local
- */
-
-$dotenv_dir = dirname(dirname(dirname(__DIR__)));
-$dotenv = new Dotenv\Dotenv($dotenv_dir, 'local.env');
-if (file_exists($dotenv_dir . '/local.env')) {
-	$dotenv->load();
-	$dotenv->required(['MYSQL_DATABASE', 'MYSQL_USER', 'MYSQL_PASSWORD', 'WP_HOME']);
-}
\ No newline at end of file
diff --git a/backend/config/environments/staging.php b/backend/config/environments/staging.php
new file mode 100644
index 0000000..528be4a
--- /dev/null
+++ b/backend/config/environments/staging.php
@@ -0,0 +1,7 @@
+<?php
+/** Development */
+ini_set('display_errors', 0);
+define('WP_DEBUG_DISPLAY', false);
+define('SCRIPT_DEBUG', false);
+/** Disable all file modifications including updates and update notifications */
+define('DISALLOW_FILE_MODS', true);
diff --git a/environment.env b/environment.env
index d5252c3..0b2a9cb 100644
--- a/environment.env
+++ b/environment.env
@@ -4,22 +4,17 @@ MYSQL_DATABASE=wordpress
 MYSQL_USER=wp_admin
 MYSQL_PASSWORD=wp_password
 
-
-API_URL=url
+# Url where backend application api is available
+API_URL=http://localhost
 
 #Wordpress config
 
 # Determines loading of enviroment specific non sensitive wordpress config file (/backend/config/environments/[WP_ENV].php)
-# Set this to local only for local wordpress development (it will activate WP_DEBUG, SCRIPT_DEBUG and SAVEQUERIES)
+# Possible values [development, staging, production]
+# Note that development value will activate WP_DEBUG, SCRIPT_DEBUG and SAVEQUERIES
 WP_ENV=development
 
-# Required for local wordpress development only for quick override of default db if needed
-#WP_DB_HOST=localhost
-
-# Required for local wordpress development since dotenv allows this kind of initialization
-# For docker deployment this is done inside docker container
-#WP_HOME=${API_URL}
-
+# Generate salts here https://api.wordpress.org/secret-key/1.1/salt/
 WP_AUTH_KEY=generate_me
 WP_SECURE_AUTH_KEY=generate_me
 WP_LOGGED_IN_KEY=generate_me