Your cycling fallacy is…
“Reducing the current amount of roadspace available for motor traffic makes air pollution worse”
This claim uses the theory that taking road space away from motor vehicles increases congestion, and therefore increases the number of cars in a given area, and the amount of pollution they generate.
Where roads are already busy, pollution levels will be high anyway, and in the most public example of cycling infrastructure taking road space from cars – on London's Embankment – there has been minimal difference in the levels of congestion and pollution. However, in the same place, the cycle lane now carries more people than the remaining traffic lanes at peak times.
The argument follows reasonable 'common sense' principles, but is untrue because it presumes that removing road space has no effect on the number of car journeys undertaken. In fact, study after study shows that adding or removing road space will increase or reduce overall traffic volumes.