Defra (the department for the environment, food and rural affairs) said that the announced 1.2 per cent real-terms increase, a sum representing £261 million per year by 2007-2008, will enable the department to achieve its aims of energy efficiency, sustainable waste management and improved recycling.
"In particular, our aim is to move towards the domestic target of reducing carbon dioxide emissions by 20 per cent by 2010 by increased spending on energy efficiency," said Margaret Beckett, secretary of state for environment, food and rural affairs.
Any increase in funds should mean more government assistance for food and beverage manufacturers, which represent some of the worst industrial polluters in the country. According to the Environment Agency, the UK's food and drink sector produces between seven and eight million tonnes of waste per year, second only to the construction industry and consumes approximately 900 megalitres of water each day, enough to supply almost three-quarters of all customers' needs in London daily.
As a result, there is enormous pressure on manufacturers to cut down on both emissions and waste. The EU Emissions Trading Scheme (EU ETS) is just one of the policies being introduced across Europe to tackle emissions of carbon dioxide and other greenhouse gases and combat the serious threat of climate change. The scheme comes into force on 1 January 2005. The environmental regulator has cautioned food and drink manufacturers that if they fail to comply with essential environmental legislation they risk hefty fines.
However, the government is confident that increases in Defra spending to tackle these issues will help industry meet these targets.
"This, together with efficiency gains of at least £610 million in 2007/8, including £300m within local government expenditure on waste services, will allow Defra to move towards achieving its priorities," the department said in a statement.
UK pressure group Friends of the Earth also welcomed the outcome of the government's spending review.
"We welcome the Chancellor's spending increases on the environment, particularly on reducing fuel poverty and increasing the efficiency of businesses using raw materials such as energy and water," said Friends of the Earth economics campaigner Simon Bullock in a statement.
In contrast however, a new report published earlier this month by the Confederation of British Industry claims that too many regulations aimed at protecting the environment are badly designed and poorly implemented.
"Firms are not trying to avoid their environmental responsibilities," said John Cridland, CBI deputy director-general. "They want to comply but they also want the government to help them do the right thing in a cost-effective way.
"Too much environmental regulation is badly designed and poorly implemented. We are not anti regulation or against rigorous enforcement but we make no apology for complaining about sloppy laws that are implemented poorly and enforced in an ill-considered fashion."
The report says the £4bn annual business cost of compliance compares well with other countries but the problems with design and enforcement mean it is higher than it should be.
Nonetheless, the spending review underlines the fact that climate change will be a key theme for the UK when it takes the presidencies of the EU and G8 next year. The government believes that more resources for reducing carbon emissions and improving energy efficiency will pave the way for the UK to lead by example in tackling the issue.
Steps are being taken. Last year, the UK's Food and Drink Federation (FDF) reported that food and drink companies had managed to reduce harmful carbon dioxide emissions by 160,000 tonnes since 2001.