WELLINGTON, Jan 31 (Reuters) - New Zealand must tackle rising greenhouse gas emissions and worsening water quality if the nation is to live up to its 'clean green' image, an environment report said on Thursday.

Boasting pristine forests, rushing rivers and majestic mountains, the sparsely populated islands have been largely protected by their geographical isolation from the pollution and other environmental problems facing regional countries.

While New Zealand's record is still better than most, it has become more "khaki" than pure green, the Environment New Zealand 2007 report, said, prompting activists to call for the issue to top the political agenda before elections this year.

One of the biggest concerns was the environmental fall-out from agriculture. The key economic sector accounts for half of all New Zealand's greenhouse gas emissions..

"Together we have made significant improvements in some areas. But, there are areas where we need to do other things better, to protect our clean green reputation," said Environment Minister Trevor Mallard as he introduced the findings.

"We simply cannot afford to be complacent."

Together, tourist and agriculture raked in export earnings of about NZ$22 billion ($17 billion), or 17 per cent of gross domestic product, in 2006, the report said.

New Zealand's pristine wilderness helped attract 1 million visitors to the country of four million in 2006. More than nine out of 10 tourists cited its landscape as the main reason to visit the islands in the southwest Pacific.

But the 450-page report found that lifestyle changes over the last decade are impacting air, water and land quality as well as plants, birds and animals, putting biodiversity and the country's clean green reputation at risk.

"ENVIRONMENT IN PERIL"

With household consumption expenditure increasing 39 percent over the period, New Zealanders are consuming more, driving more and using more energy, it said.

Increasing numbers are taking public transport, but high rates of car ownership are also driving one of the fastest-growing emissions sectors, increasing pollution and pressure on the environment and health, the report stated.

"Our environment is in peril. If we don't act fast our 'clean green' reputation will be revealed as a farce, and our economy will suffer as a result," said Greenpeace campaign manager Carmen Gravatt.

Noting the emergence of increasingly environmentally aware consumers, Greenpeace called for farmers to be included in emissions trading schemes aimed at combating climate change, saying the rise of industrial, large-scale dairy farming was having a "major impact" on the environment.

Exports of land- and sea-based primary goods such as wool, food crops, wood, wine, and natural cosmetic products are the country's top foreign exchange earners alongside tourism.

Environment Minister Mallard said he was optimistic New Zealand could enhance its environment credentials and remain internationally competitive, despite the challenges.

"New Zealanders are an innovative "can do" lot. We're techno savvy, we work smart and hard, and we have huge natural competitive advantages," he said.

"If we can't do it, then who can?" (Writing by Gillian Murdoch, Editing by Katie Nguyen)

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