Incoming solar radiation, or insolation, is the basic source of energy for atmospheric processes. The Earth's orbital revolution around the Sun and its rotation on a tilting polar axis produce seasonal and daily changes in the amount of insolation. Gases, clouds, and suspended particles in the atmosphere scatter and reflect about 26 percent of insolation into space. The Earth's surface reflects another 4 percent, although the proportion varies with the angle of the Sun and the reflectivity of different materials. The atmosphere and the Earth's surface together have been calculated to absorb some 70 percent of insolation. (Studies made in the 1990s, however, suggest that current computer models of the atmosphere, mentioned below, have significantly underestimated the amount of solar energy absorbed by clouds.) This absorbed energy is then converted into the heat and kinetic energy that create weather and climate.

Absorption by the atmosphere of energy emitted from the Earth's surface delays the energy's return to space, creating a greenhouse effect. Eventually all absorbed solar energy returns to outer space as long-wave radiation, maintaining a long-term global energy balance and a nearly constant average global temperature.

The actual energy budget and resulting effects on climate at a given place depend on additional factors. Latitude determines the duration of daylight as well as the angle of the Sun's rays, which are more effective when the Sun is near the zenith. Altitude is also a factor in climate, because air temperature normally decreases with elevation at a rate of about 6° C/1,000 m (3.3° F/1,000 ft). General atmospheric and oceanic circulation systems redistribute heat and moisture, helping to prevent overheating in the tropics and intense cold near the poles. Prevailing winds, especially trade winds and westerlies, transfer temperature and moisture properties between the continents and the oceans. Because water is slower to heat and cool than land and affords a ready supply of moisture, regions downwind from oceans usually have more moderate temperatures and more precipitation than do the interiors of the continents. This maritime influence is marked in middle latitudes. Ocean currents and drifts further promote the transfer of heat.

Areas lying in the paths of cyclonic storms are subjected to the associated variability of winds, temperature, and precipitation. Where prevailing winds, air masses, and traveling storms encounter mountains, the barrier effect retards movement, often forcing the air to rise. This orographic effect causes cooling as the air expands and may induce greater precipitation on windward slopes, whereas the leeward slopes experience a rain shadow effect. Mountain barriers can also slow the passage of cold, stable air masses, thereby protecting regions to the leeward. Local relief features and differences in slope or exposure affect the receipt of insolation, water runoff, and wind conditions. Daily differences in heating and cooling generate local mountain and valley winds and land-sea breezes. Inland bodies of water also can create daily breezes as well as influence temperature and humidity in their vicinity owing to the lake effect.