Currently the environment variable is parsed when debug is required, this means that if the module wants to dynamically change the environment (for example in the presence of a --debug argument) then the require has to be done after this logic instead of at the top of the file, as is convention.
I think it would be better to parse the environment variable when debug() is first called as then modules which would like the extra flexibility can do the following and it will work with the modified env.
var debug = require('debug');
// environment changing logic
debug = debug('module');