About 500 protesters shut down a part of Sydney's CBD to rally against the proposed changes on Tuesday.
The legislation, which is set to be passed on Wednesday, will increase fines for illegal entry to mining and CSG sites from $550 to $5500 and could see anti-CSG protesters jailed for up to seven years.
The state government also wants to give police greater powers to search, seize and move on protesters.
Mr Baird said he didn't believe the laws went too far.
"It's quite simple, peaceful protests are fine," he said.
"Anyone that wants to disrupt a business or ultimately act illegally and puts the lives of themselves and others at risk, well we've put these measures in and I think it's appropriate."
Greens MP Jeremy Buckingham described the legislation as a "draconian crackdown" designed to intimidate protesters and benefit the mining and gas industries, while Labor MP Ryan Park told parliament the legislation was disgraceful.
A Reachtel poll commissioned by the NSW Nature Conservation Council on Monday showed 61.4 per cent of people opposed increasing police powers and fines for protest action.
The bill passed its second reading in the upper house on Tuesday night with the support of the Shooters and Fishers Party and Christian Democrat Fred Nile.
Multiple amendments were also put forward and the bill is due to be voted on on Wednesday afternoon.