The Green Paper, by former Hastings mayor and MP Lawrence Yule, called for a more strategic approach to planting trees and outlined policy areas for urgent investigation to address the controversial issue.
Mr Yule’s research was funded by Local Government New Zealand, 16 individual councils, including Southland and Waimate, and Beef + Lamb New Zealand.
It identified options for strategically managing the increased planting required to meet New Zealand’s international commitments to reduce climate emissions.
The paper outlined the "real risk" short-term land-use decisions would be made to the detriment of long-term land-use flexibility, rural communities and export returns.
"Currently, increasing carbon prices in the New Zealand Emissions Trading Scheme (ETS) means carbon farming coupled with plantation forestry is, in the short-term, significantly more profitable than sheep and beef cattle farming.
"There is little national guidance to help local authorities stop swathes of productive sheep, beef and wool-producing farmland being converted to forestry, as the ETS currently allows 100% of fossil-fuel emissions to be offset through forestry and councils currently have no available tools to place controls on the planting of trees," Mr Yule said.
Widespread concerns have been previously expressed about the conversion of productive farmland to carbon forestry, including in Otago where the debate kicked off with the sale of a large-scale sheep and beef farm inland from Oamaru.
In his report, Mr Yule said the issue was complex and simple solutions did not exist.
"Undoubtedly New Zealand needs to use forestry [both native and indigenous] as a fundamental part of our climate change mitigation strategy.
Equally, New Zealand farmers are some of the most efficient in the world and can usually export high-quality food with a lower carbon footprint than the destination country’s domestic product," he said.
The long-run price of carbon was uncertain, log exports were heavily reliant on China and several commentators believed China would be self-sufficient in timber in 20 years.
Additionally, the domestic sawmilling industry was operating in a very challenging commercial environment. "While the current forestry/carbon returns look very appealing that may not always be the case," he said.
In the short term, there were no available tools to place controls on the planting of trees. Any change to the National Environmental Standards for Plantation Forestry to allow councils to have more control would be difficult to implement at a council level without a national strategic framework.
The paper has been released before a workshop next month involving a range of stakeholders including Forestry Minister Stuart Nash, councils, forestry interests, B + LNZ and Local Government New Zealand.
B+LNZ chief executive Sam McIvor said the research would play an important role in shaping future policy.
"While we welcome the Government’s signals that it is considering policy changes to address the wholesale conversion of sheep and beef farmland into carbon farming, the Government action has been too slow, the time to act is now."