It says air pollution from burning coal in the area north of the Huai River, with a population of some 500m people, was 55% higher than in the south.
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The region also had higher rates of heart and lung disease as a result of the policy in force up to 1980.
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The study was conducted by researchers from China, the US and Israel.Â
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They studied pollution and deaths in 90 cities in the north and south between 1981 and 2000.
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They specifically looked at the increase in a type of pollution called total suspended particulates (TSPs) found in soot and smoke.
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The researchers then analysed mortality statistics in 1991-2000 and found evidence of shorter life expectancy in the previously "free coal" areas.
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"Life expectancies are about 5.5. years lower in the north owing to an increased incidence of cardio-respiratory mortality," said the study published in the Proceedings of the National Academy of Sciences.
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"The analysis suggests that the Huai River policy, which had the laudable goal of providing indoor heat, had disastrous consequences for health."
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The scientists argued that their findings may help other emerging economies - such as Brazil or India - to find better ways to combine a drive for economic growth and public health protection.
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The report's findings will increase pressure on the Chinese authorities to do more to tackle pollution, the BBC's Martin Patience in Beijing reports.
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Earlier this year, the government faced a public outcry after air pollution soared past levels considered hazardous by the World Health Organization, our correspondent says.