The Kyoto Forestry Association (KFA) has welcomed the passing of the Emissions Trading Scheme legislation.

The bill, which passed on a 63-57 vote after its third reading in Parliament last night, will eventually bring all sectors of the economy under a regime which sets limits on the amount of greenhouse gas they can emit.

Those that breach their limit will have to buy credits from those that are below their cap.

KFA spokesman Roger Dickie s aid the passage of the scheme represented New Zealand's start in the fight against climate change.

"Forestry was always going to be New Zealand's least-cost answer to reducing our Kyoto liability and genuinely fighting climate change ...and the legislation will kick-start new planting from 2009 onwards," he said.

However, Mr Dickie questioned the timeline of the bill, saying KFA believed all gases and all sectors, particularly agriculture, should be brought into the ETS sooner than planned.

"The sooner that the agribusiness sector accepts that it will soon face a carbon price, the sooner it will begin adapting to that price and the sooner land values will adjust accordingly to encourage afforestation," he said.

As it stands the bill brings electricity under its umbrella in 2010, transport in 2011 and agriculture in 2013.

Green Party co-leader Jeanette Fitzsimons said that while the passing of the ETS was a step in the right direction, it was time to make some big strides.

At the third reading of the bill, Ms Fitzsimons said it was important for New Zealanders to recognise that the emissions trading scheme had not fixed climate change.

" We need to adopt real targets within New Zealand," she said.

"We must also work in international forums to get the United States and the larger developing countries to sign up to an international agreement on climate change."

Federated Farmers, which has consistently opposed the ETS, said Parliament had made a bad mistake by passing it.

"This has all been rushed through Parliament for short-term political gain rather than any sound economic or environmental reasons that will benefit New Zealand or the globe," said the federation's president Don Nicolson.

"The reality is it will cost New Zealand significant real money and is unlikely to achieve the global outcomes sought.

"For some politicians the passing of this bill is seen as a clever political public relations stunt."

Mr Nicolson said agriculture would be affected "from day one" by higher input costs.