I've posted before about this. The issue isn't the 20mph limit - it's the enforcement (or lack thereof) and the fact that on single roads we now have a two-tier speed system. On the one hand, people travelling at 20 - a decent speed on most roads in SE23; on the other hand, people travelling in excess of 30.
I agree with Chris - conventional cars travelling at 20 will pollute more than a car travelling at 30. They're on the road for longer to cover the same distance, which means the engine is running for longer. These limits are environmentally costly (as, incidentally are speed bumps which encourage speeding up and slowing down) but they're not about reducing pollution, are they?
If you hit someone at 20, they're much less likely to be killed or seriously injured than at 30 or 40mph (though I'd prefer not to hit anyone at all). And for that reason, 20 is a good idea. Theoretically it should also help with congestion with the theory being that traffic should flow better for speed being regulated rather than stopping and starting, but I don't think that London traffic flows at all well (that's to do with road layouts and the plethora of traffic lights we have).
More vulnerable road users should, again in theory, be better off. 20 isn't that much faster than most regular cyclists will be travelling and there's less chance of a knock / sideswipe with cars going more slowly.
To my mind the problem is that the borough-by-borough piecemeal implementation has (as ever) been a bonanza for those who sell traffic signs and road paint, but there has been little or no education of the driving population about what they should be doing and why. It's not often you'll hear me say it, but I think someone needs to spend a lot more money on marketing and advertising in this case. And it needs to be co-ordinated across London.
Just painting numbers on the road isn't enough - we need to change the perception of speed so that going too fast in your car is considered as anti-social and unacceptable as drinking and driving.
Maybe worth another thread, but I like the honesty and transparency of the mayor in Paris, who openly admits that the objective there is to reduce the number of cars on the road by 50% rather than hiding behind a fig leaf of safety.