The association between consumption of sugar sweetened beverages (SSBs) and diseases including diabetes, liver disease and dental disease is well known, yet SSBs continue to be aggressively promoted, including on university campuses. Healthy beverage initiatives (HBIs) are focused on improving health by decreasing consumption of SSBs. Some HBIs also aim to improve environmental sustainability, e.g. by substituting tap water for SSBs, including the HBI on the 10 campuses of the University of California. However, there is no study of HBIs’ potential environmental benefits. To address this knowledge gap we carried out an environmental life cycle assessment of greenhouse gas emissions, blue water use, and plastic pollution for both liquid content and container for the 940,773 liters of beverages consumed in one calendar year at the University of California, Santa Barbara. We found that climate and water impacts per liter for liquid contents of 10 SSB beverage types and the non-SSB versions of these 10 types without added sugar, were very similar and larger than that of the containers. Impacts of six container types varied widely, with climate impact highest for glass, and blue water and plastic impact highest for plastic containers, while aluminum had higher climate impact than plastic. We then evaluated the environmental benefits of 12 counterfactual HBI scenarios with different combinations of container types and liquid beverages for SSBs, non-SSBs, bottled water, and tap water. The scenario that replaced all other beverages with tap water eliminated almost all environmental impacts, while scenarios that reduced SSBs but increased beverages other than tap water took back many benefits of reduced SSBs. Our results show that to optimize potential environmental benefits, HBIs need to emphasize reducing consumption of all commercial beverages and replacing them with tap water, which will also optimize health benefits. Our methods and results will be valuable for higher education, other institutions, and communities seeking to maximize both health and environmental benefits of healthy beverage policies.