The Ministry for the Environment says it has no power to tell councils how to recycle their rubbish.
Several councils are overhauling their recycling systems because of a breakdown in the world market for recycled goods.
The ministry says the cost to councils of recycling will be somewhat offset when the Waste Minimisation Act comes into force later this year.
Councils will be paid $10 for every tonne of recycled rubbish.
Next week, Wellington City Council is expected to consider replacing green bin collections with sales of recycling bags to fill a budget shortfall of $1 million.
Christchurch is phasing in a scheme under which residents will be charged $62 to $82 annually for the collection of general, organic and recyclable waste.
Auckland introduced a new charge last October, of $210 per annum for their rubbish and recycling.
