diff --git a/pylons_app/config/environment.py b/pylons_app/config/environment.py
--- a/pylons_app/config/environment.py
+++ b/pylons_app/config/environment.py
@@ -1,9 +1,11 @@
 """Pylons environment configuration"""
 import logging
 import os
-from pylons import config
+
 from mako.lookup import TemplateLookup
 from pylons.error import handle_mako_error
+from pylons import config
+
 import pylons_app.lib.app_globals as app_globals
 import pylons_app.lib.helpers
 from pylons_app.config.routing import make_map
@@ -34,11 +36,9 @@ def load_environment(global_conf, app_co
         directories = paths['templates'],
         error_handler = handle_mako_error,
         module_directory = os.path.join(app_conf['cache_dir'], 'templates'),
-        input_encoding = 'utf-8', default_filters = ['escape'],
-        imports = ['from webhelpers.html import escape'])
-
-    # Customize templating options via this variable
-    tmpl_options = config['buffet.template_options']
+        input_encoding = 'utf-8', output_encoding = 'utf-8',
+        imports = ['from webhelpers.html import escape'],
+        default_filters = ['escape'])
 
     # CONFIGURATION OPTIONS HERE (note: all config options will override
     # any Pylons config options)