This study analyzes Coupled Model Intercomparison Project phase 5 (CMIP5) model output to examine the covariability of interannual Southern Hemisphere Hadley cell (HC) edge latitude shifts and shortwave cloud radiative effect (SWCRE). In control climate runs, during years when the HC edge is anomalously poleward, most models substantially reduce the shortwave radiation reflected by clouds in the lower midlatitude region (LML; ~28°S-~48°S), although no such reduction is seen in observations. These biases in HC-SWCRE covariability are linked to biases in the climatological HC extent. Notably, models with excessively equatorward climatological HC extents have weaker climatological LML subsidence and exhibit larger increases in LML subsidence with poleward HC edge expansion. This behavior, based on control climate interannual variability, has important implications for the CO2-forced model response. In 4×CO2-forced runs, models with excessively equatorward climatological HC extents produce stronger SW cloud radiative warming in the LML region and tend to have larger climate sensitivity values than models with more realistic climatological HC extents.