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The building sector represents a major source of global carbon emissions, with heating and cooling systems being particularly critical contributors, making the evaluation of sustainable low-carbon alternatives an urgent priority. In this study, life cycle assessment (LCA) methodology is used to analyze ground source heat pump (GSHP) systems against traditional heating, ventilation, and air conditioning (HVAC) systems based on project data from the city of Jinan and electrical grid characteristics of Northern China. It is specified that the functional unit is providing heating and cooling that maintains the indoor temperature of the building between 18 °C and 26 °C for 20 years. Following ISO 14040 standards, carbon emissions and economic performance across four phases—production, transportation, construction, and operation—over a 20-year life cycle were quantified using actual material inventory data and region-specific carbon emissions factors. The results demonstrate obvious environmental advantages for GSHP systems, which achieve a 51% reduction in life cycle carbon emissions compared to traditional systems based on the current power generation structure. Furthermore, sensitivity analysis shows that as the proportion of renewable energy in the grid increases to meet carbon neutrality targets, the reduction potential can even reach 88%. Economic analysis reveals that despite higher initial investments, GSHP systems achieve favorable performance with a positive 20-year net present value and an acceptable dynamic payback period for the project. This study shows that GSHP systems represent a viable strategy for sustainable building design in northern China, and the substantial carbon reduction potential can be further enhanced through grid decarbonization and renewable energy integration. The implementation of the GSHP system in newly constructed buildings, which require both heating and cooling, in Northern China, can be an effective strategy for advancing carbon neutrality goals.