Figures from the Institute for Public Policy Research (IPPR) show the UK recycled or composted only 18% of waste in 2003-04.
The IPPR says the UK has one of the worst recycling rates in Europe, with only Greece and Portugal doing worse.
'Carrot to recycle'
Mr Bettison, chairman of the LGA's environment board, said charging to collect non-recyclable rubbish would give people " a real carrot to recycle".
"Some people say 'what's in it for me?' Well, let's make it in their interest to recycle by helping them. In that way, we're encouraging them to recycle more," he said.
The chips would carry information about which address the bin belonged to.
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ENGLAND'S TOP FIVE RECYCLING COUNCILS
St Edmundsbury: 50.64%
Forest Heath: 48.59%
South Cambs: 46.80%
Lichfield: 46.35%
Harborough: 46%
Source: IPPR
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The weight of rubbish in each bin would be measured by equipment installed in collection trucks.
Mr Bettison said if councils get the go-ahead from government, the weighing schemes could be piloted within the next 12 months and commonplace across the country a year after that.
A Department for Environment, Food and Rural Affairs (Defra) spokeswoman said the government is looking at a "range of options" to help the UK meet tough European landfill reduction targets.
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ENGLAND'S BOTTOM FIVE RECYCLING COUNCILS
Newham: 6.23%
Tower Hamlets: 7.35%
Liverpool: 7.63%
High Peak: 9.82%
Wirral: 9.93%
Source: IPPR
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She said the department has paid £5 million to councils to fund 40 pilot schemes, which include waste monitoring.
'Tax rises'
The LGA has warned council tax bills will have to rise if councils have to pay big EU fines because of poor recycling rates.
Councils faced fines of up to £150 per tonne of rubbish if they failed to meet targets under the EU landfill directive.
IPPR director Nick Pearce said that for the new system to be fair, rubbish collection would have to be removed from the council tax.
"The government should give local authorities powers to charge for collecting non-recyclable waste," he said.
"Our European neighbours have shown that where charges are commonplace, recycling rates will rise."
The IPPR figures showed big differences between the recycling rates of local authorities in England.
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WASTE RECYCLED IN EU
Netherlands: 65%
Austria: 59%
Germany: 58%
Belgium: 52%
Sweden: 41%
Denmark: 41%
Luxembourg: 36%
Spain: 35%
Ireland: 31%
Italy: 29%
Finland: 28%
France: 28%
UK: 18%
Greece: 8%
Portugal: 3%
Source: IPPR
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St Edmundsbury, in West Suffolk, fared best, recycling 50.64% of its waste. Newham, in London, fared worst, recycling only 6.23% of waste.
Privacy campaigners, however, are warning against the "chipped bin" scheme.
Simon Davies, founder of Privacy International, said he had grave concerns about the increasing use of tagging technology to gather information.
"Residents need to be aware that once they accept this there is no turning back," he added. "This just takes it to a new level."
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