This projects proposes a novel framework to modeling the economic consequences of climate change impacts and the induced policy responses, in terms of both mitigation and adaptation strategies at regional scale.To accomplish this task, state-of-the-art IAMs will be modified to include (1) The causal chain between sectoral and regional economic activity and emissions; (2) The climate change feedbacks induced by temperature increase on the different economic sectors and regions; (3) The optimal policy response in terms of mitigation; (4) The optimal policy response in terms of regional and sectoral adaptation.This is a challenging task because of the different nature of adaptation and mitigation and the need of combining optimization with a regional/sectoral detail in a general equilibrium framework, but feasible. Integrating adaptation strategies in an optimization framework will allow to quantify adaptation needs under different mitigation and climate change damage scenarios and to study cross-sectoral spillovers and interactions between the two policy responses, with a sectoral resolution. The project proposed is intrinsically interdisciplinary, requiring a clear understanding of the scientific basis for estimating climate impacts and the skill to combine rigorous empirical analysis with judgment and assumptions in order to cope with incomplete or incommensurate data. The work will be articulated in three main activities: (1) Model development and coding; (2) Data gathering; and (3) Numerical exercises.The expected impact of this research is high because it will develop a roadmap that will serve the future research on induced regional adaptation in a macroeconomic framework.