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In the near future, Switzerland is predicted to be affected by climate change, that is bound to impact both water demand and water supply in multiple ways. While water demand by households, firms and agriculture increases, water supply decreases (ProClim and OcCC, 2007) as climate change alters the hydrologic cycle and thus the water resources. To best face the challenges that lie ahead, an understanding of the economic impact of climate change and different adaptation strategies in the water sector is essential. This study is part of a wider research project simulating the economic impact of climate change in Switzerland, mandated by the Federal Office for the Environment (FOEN).