A. It's powered by gravity
B. It's powered by diesel
C. It's powered by electricity
D. It's powered by unleaded petrol
Trams are powered by electricity and therefore don't emit exhaust fumes. They ease traffic congestion by offering drivers an alternative to using their car, particularly in busy cities and towns.
Arguably if the electricity is produced by coal then the problem of pollution is moved somewhere else rather than being eliminated (which would be the case if the electricity source was renewable e.g. by wind, water or geothermal generation).