The value returned by time is the number of seconds since epoch (often 0:00, Jan 1st, 1970 GMT). The number of seconds since some point in time doesn't change depending on where you happen to be located, so it's not affected by $ENV{TZ}.

Convert the value return by time into a local time (e.g. using localtime) to see the change.

Note: I think you need to call POSIX's tzset for the change to be noticed by localtime.

Note: I think changing $ENV{TZ} *after* perl starts doesn't work properly in Windows. It works fine if you change it *before* perl starts.

use POSIX qw( tzset );

print localtime(time) . " in $ENV{TZ}\n";

$ENV{TZ} = 'GMT-8';
tzset();

print localtime(time) . " in $ENV{TZ}\n";
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Mon Dec  3 00:22:29 2007 in America/New_York
Mon Dec  3 13:22:29 2007 in GMT-8
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See the documentation for time. It's not affected by time zone because its value is always relative to a specific time in a specific time zone.

From time:

       time
Returns the number of non-leap seconds since whatever time the 
system considers to be the epoch, suitable for feeding to 
"gmtime" and "localtime". On most systems the epoch is 00:00:00 
UTC, January 1, 1970; a prominent exception being Mac OS 
Classic which uses 00:00:00, January 1, 1904 in the current 
local time zone for its epoch.
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My time also outputs something in the same numerical region as yours (1196656266). Conclusion: You're using one of the various UNIX/Linux/etc. flavours, or maybe even just Windows (I don't know what they use as epoch, but meh); therefore, your output of time is number of seconds since epoch (which is always UTC, as per doc).