Ultimately you need staging, yes.

But you can’t have every dev tweaking staging at the same time as they work. How can you debug things when the ground is shifting beneath you?

Ideally every dev has their own AWS account to play with, but that can be cost prohibitive.

A good middle ground is where 95% of work is done locally using emulators and staging is used for the remaining 5%.

One of the first things I do when building a new component is create a docker compose environment for it.