We present an assessment of installing a regional heating and cooling system in the Nishi(West)-Shinjuku area of Tokyo, Japan. In this assessment, we estimate the CO2 payback-time, when air source heat-pumps (ASHP) are replaced with a ground-source heat-pump (GSHP) system. We calculate CO2 emissions from transportation of the cooling tower, materials for the underground heat exchanger, and the digging loads and transportation loads incurred when the GSHP system is installed to replace the air source cooling system. The total CO2 emission from the installation of the GSHP system was estimated to be 67,701t-CO2, with 87% of the CO2 emissions resulting from the digging process. CO2 emissions from the operation of the GSHP system were estimated from the total energy-efficiency of the system and the heating and cooling demand in Nishi-Shinjuku area. Using the GSHP system, 33,935t-CO2 would be emitted per year. We estimate that using the GSHP system would result in a reduction of 54% of the CO2 emissions, or 39,519t-CO2 per year. From these results, the CO2 payback-time for replacing the conventional ASHP in the 1 km(2) studied region with the GSHP system is assessed to be 1.7 years.