This study aims to shed light on the concept of green economy and its role in driving sustainable development indicators in Iraq for the period 2005–2021, as the transition of the concept from a narrow relative concept to a broad concept includes many new patterns of consumption and production as well as a clean environmental atmosphere. The researcher combined the analytical approach to show the impact of the green economy on some sustainable development indicators in Iraq. The inductive approach used a modern metric model based on the autoregressive distributed lagging (ARDL) methodology. Sustainable development indicators in Iraq for the period 2005–2021 were used as a measure of sustainable development using sustainable secondary data from international development reports. The results show a significant long-term inverse relationship between the sustainable development index and the average carbon dioxide emissions index per capita. There is a significant long-term positive relationship between the indicators of the relative importance of the agricultural sector, the area of arable land, the total revenues of the Tigris and Euphrates rivers, and sustainable development indicators. The results also show a long-term insignificant association between the forest area index and the sustainable development index. This research introduces a novel approach to assessing the green economy in Iraq and examines its influence on the sustainable development index. It examines the possible social and economic ramifications of shifting from traditional to green GDP, including the immediate economic drawbacks and the policy modifications required to facilitate this transition.