The green-lighting of new tramway projects in America is the latest sign that trams (also known as streetcars) could hold the key to reducing congestion and making the world's cities greener, healthier places.

Residents and visitors to five American cities will soon be enjoying the tram experience so common in Europe, following a $130 million grant from the Federal Transit Administration.

New tram systems in St Louis, Cincinnati and Fort Worth are planned, along with extensions to existing cities in Charlotte and Dallas.

US President Barack Obama has pledged to improve "livability" in US cities by creating jobs, boosting economic activity and providing easier and more efficient ways to get around.

Federal Transit Administrator Peter Rogoff said that electric trams, which are popular in European cities, offer unique benefits to city dwellers.

“Streetcars are making a comeback because cities across America are recognizing that they can restore economic development downtown – giving citizens the choice to move between home, shopping and entertainment without ever looking for a parking space,” he said.

Trams were popular in most of the industrialized world through the 19th and early 20th centuries, but disappeared to make way for cars in many places during the course of the last century.

However, they are now experiencing somewhat of a renaissance, especially in congested cities where their near-silent, green operation is popular with residents.

In 2006, Paris opened its first central tramway in 60 years, the Tramway des Maréchaux, which now carries a reported 100,000 people daily.

Scottish capital Edinburgh is expected to inaugurate its new system this year, the first in the city since the previous tram routes were closed in 1953.

Since the New Zealand city of Christchurch reopened its tram network as a "heritage" route in 1995, the city has been faced with calls to extend and modernize the system to relieve the number of cars in the city.

The Australian city of Melbourne boasts the largest city tram network in the world, with 245 km of tracks, 500 trams and 1,813 stops.