What is the importance of water vapour in the atmosphere?

Importance of water vapour in the atmosphere:

• It bsorbs parts of the insolation from the sun and preserves the earth’s radiated heat.
• It acts like a blanket allowing the earth neither to become too cold nor too hot. 
• Water vapour also contributes to the stability and instability in the air.

Further Reading:

• General Circulation Of The Atmosphere
• Composition of the atmosphere