Abstract: An integrated modelling framework (IMF) is developed to analyse impacts of climate andpolicy changes on farm welfare and the environment. The IMF is applied on two contrasting grassland (south) and cropland (north) dominated Austrian landscapes. The IMF combines the crop rotation model CropRota, the bio-physical process model EPIC and the bio-economic farm model FAMOS[space] and applies combined climate change and policy scenarios. Changing policies reduce farm gross margins by -36% and -5% in the two landscapes respectively. Climate change increases gross margins and farms can reach pre-reform levels on average. Climate induced intensification such as removing of landscape elements andincreasing fertilization can be moderated by an agri-environmental program (AEP). However, productivity gains from climate change increase the opportunity costs for AEP participation.