The increasing demand for sustainable building practices highlights the need for energy-efficient and renewable energy integration options for conventional air conditioning systems, particularly in regions with extreme climatic conditions. One promising solution is the Earth-Air Heat Exchanger (EAHE) system, which uses the ground’s stable temperature to cool air through underground pipes, significantly reducing cooling demands in hot climates. This study evaluates EAHE performance in a case study residential building in Saudi Arabia’s hot climate using TRNSYS simulations, considering tube length, diameter, and burial depth during peak cooling months (May–September) and assessing integration into sustainable building practices. Site-specific factors, including soil thermal properties and climatic conditions, are also incorporated to enhance model accuracy. Economic and environmental assessments are conducted to compare EAHE systems with traditional cooling methods, demonstrating that EAHE can achieve up to a 30% reduction in energy consumption during peak periods and yield maximum energy savings of 40% in June. The improvements show notable reductions in operational costs and carbon emissions, supporting decarbonization and climate change goals aligned with SDGs 7, 11, 12, and 13. Challenges like soil variability, system complexity, and regulatory constraints may necessitate location-specific solutions. The study further advocates integrating advanced monitoring technologies, optimization strategies like IoT-based controls and other renewable energy sources like solar panels to improve system sustainability and performance. Overall, the findings provide actionable insights for policymakers and engineers, supporting the broader adoption of earth tube cooling systems as a viable, energy-efficient solution for sustainable urban development in sub-tropical regions.