Air conditioning and refrigeration have become necessary in modern life, accounting for more than 7.8% of greenhouse gases (GHG) emitted globally. Reducing the environmental impact of these systems is crucial for meeting the global GHG emission targets. Two principal directions must be considered to reduce the environmental impact of air conditioning systems. Firstly, reducing the direct effect by looking at less harmful refrigerants and secondly, reducing the indirect effect by searching for options to improve the system efficiency. This study presents the latest developments in the vapor compression cycle and natural refrigerants, focusing on water as a refrigerant. Natural refrigerants, and especially water, could be the ultimate solution for the environmental problems associated with the operation of vapor compression cycle (VCC) cooling systems, including ozone depletion (OD) and global warming (GW). Reducing the environmental impact of building cooling systems is essential, and the recent system improvements made to enhance the system coefficient of performance (COP) are thoroughly discussed in this paper. Though the cycle improvements discussed in this work are essential and could increase the system efficiency, they still need to solve the direct environmental impact of refrigerants. Accordingly, this paper suggests that natural refrigerants, including water, are the most suitable strategic choice to replace the current refrigerants in the refrigeration and air conditioning industry. Finally, this study reviews the latest VCC system improvements and natural refrigerants in order to guide interested researchers with solutions that may reduce the environmental impact of VCC systems and suggest future research areas.