Slower average traffic speeds are correlated with lower efficiency but that doesn't mean that lower speeds cause the lower efficiency.
Vehicle engines are most efficient when running at constant speed (and the efficiency does with speed). Low average speeds in urban areas are most commonly the result of stop-start driving due to junctions, congestion, etc.
I don't know whether a 20 mph speed limit will increase or decrease pollution.
But the stated rationale is to address road traffic fatalities and injuries - surely a worthy aim.
Do you have any better suggestions? Or do you just not care about death and injury on the roads?