1996 Volvo 850 - What is this?

I have had my volvo for about 9 months now, and must say I love this 17 year old car more than any other vehicle I have ever owned. I feel like king of the world riding around in one of the most luxurious feeling cars I have been in. I haven't driven many cars either haha. Heres the problem though, I have fixed a couple things on it and this one had me wondering. Was riding along and all of sudden the car started running like shite out of nowhere even the A/C started kicking on and off (its 101 degrees here in phoenix) so I pull over and look at the engine. Check engine light had been on for some time since I replaced the spark plug wires. Find this hose that was broke off the front. Just pulled off the old crusty part and pushed more on. Need to probably get a whole new hose there. Here is a picture or two, just wondering if anyone knows what the heck this is and what it does. Car started running great again after doing that, lights still on though.

tl;dr
WHAT IS THIS, its on very front of my engine.