Fourier Optics
When light travels through thin clouds made up of nearly uniform sized water or aerosol droplets or ice crystals, diffraction or bending of light occurs as the light is diffracted by the edges of the particles. This degree of bending of light depends on the frequency (color) of light. The result is a pattern of rings, which seem to emanate from the sun, moon, planet or other astronomical object. The most distinct part of this pattern is a central, nearly white disk. This is an atmospheric airy disc. It is distinct from rainbows and halos, which are mainly caused by refraction.
The photo (left) shows a diffraction ring around the rising sun. A veil of aerosol caused this phenomenon, and the effect dramatically disappeared, when the sun rose high enough so that the pattern was not presented to the observer at the Earth's surface. Sometimes these phenomena are called a corona, but true diffraction is not an effect of the solar corona.
On the right is a one tenth second shutter speed exposure showing presenting an overexposed full moon. The moon is seen through thin vaporous clouds which glow with a white disk surrounded by an illuminated red ring. A longer exposure would show more faint colors beyond the outside red ring.
Another form of atmospheric diffraction or bending of light occurs when light moves through fine layers of particulate dust trapped primarily in the middle layers of the troposphere. This effect differs from water based atmospheric diffraction because the dust material is opaque whereas water allows light to pass through it. This has the effect of tinting the light the color of the dust particles. This tinting can vary from red to yellow depending on geographical location. the other primary difference is that dust based diffraction acts as a magnifier instead of creating a distinct halo. This occurs because the opaque matter does not share the lensing properties of water. The effect is to make an object visibly larger while being more indistinct as the dust distorts the image. This effect varies largely based on the amount and type of dust in the atmosphere.
Read more about this topic: Atmospheric Diffraction