diff --git a/observations/config_test.go b/observations/config_test.go
new file mode 100644
index 00000000..2dd3b5eb
--- /dev/null
+++ b/observations/config_test.go
@@ -0,0 +1,26 @@
+package observations
+
+import (
+	"os"
+	"testing"
+)
+
+func TestApplyEnvVars(t *testing.T) {
+	os.Setenv("CLUSTER_METRICS_ENABLESTATS", "true")
+	mcfg := &MetricsConfig{}
+	mcfg.Default()
+	mcfg.ApplyEnvVars()
+
+	if !mcfg.EnableStats {
+		t.Fatal("failed to override enable_stats with env var")
+	}
+
+	os.Setenv("CLUSTER_TRACING_ENABLETRACING", "true")
+	tcfg := &TracingConfig{}
+	tcfg.Default()
+	tcfg.ApplyEnvVars()
+
+	if !tcfg.EnableTracing {
+		t.Fatal("failed to override enable_tracing with env var")
+	}
+}