how is the natural greenhouse effect created?

Answer 1

"Greenhouse gasses" such as CO2, CH4, N2O, and especially water vapor trap the heat that would usually be radiated from the earth back into space and this warms the atmosphere.

Answer 2

If the earth's atmosphere consisted only of Nitrogen and Oxygen, and no greenhouse gases, the average temperature would be about 33 degrees Celsius cooler than it is now, or about -18 degrees Celsius. All land except perhaps a bit of land close to the equator would be covered in glaciers.
Most of the greenhouse warming comes from water vapour, which raises the atmosphere's temperature by more than 30 degrees. The rest comes from other greenhouse gases - mostly carbon dioxide, but also methane and other trace gases.