World societies experience today large transformation processes both in the social, economic and environmental dimensions. These transformations are usually described under the heading of ‘global change’, to emphasize the increasing interactions between them. The objective of the proposal is three-fold: (1) to provide significant advances in the estimation of socio-economic impacts of global challenges – at Global, European and regional scale; (2) to identify optimal adaptation strategies; (3) to evaluate total costs and the optimal mix of adaptation and mitigation against global changes. Work Package (WP) 1 will examine the sources, interactions and characteristics of global changes, including the emergence of fast-growing economies, environmental degradation, competition on the use of exhaustible resources, international competitiveness issues. A primary objective of the proposal is to estimate socio-economic impacts arising from global changes by using economic models. The consortium is endowed with a large set of state-of-the-art, internationally renown, modeling tools. Models will be further expanded and enriched in WP 3. Key areas of research will be: agriculture, forestry, land use, energy, EU competitiveness, labor, international trade. The socio-economic impact of these challenges on key sectors/areas will be examined with the enhanced set of models in WP 4 and WP 5. While in WP 4 impacts of global challenges will be studied assuming limited adaptive capacity, in WP 5 optimal adaptation strategies will be examined. WP 5 will also inform on total costs of global challenges and on the optimal mix of mitigation and adaptation. In WP 2 will develop empirical and theoretical insights on key issues which will have a value per se and will also be used to enhance models in WP 3. WP 6 will complement the analysis of WP 4 and WP 5 developing theoretical innovations concerning discounting, risk and ambiguity and by testing them numerically with models.