The invention is a thermosetting coating composition comprised of an aliphatic polycarbonate resin and a cross linker. The aliphatic polycarbonate resins are derived from hydroxyl containing compounds including 2,2,4,4-tetramethyl-1,3-cyclobutanediol (TMCD) and 1,4-cyclohexane dimethanol (CHDM). The coatings made of these polycarbonates exhibit exceptional toughness; they possess a high degree of hardness while maintaining a high level of flexibility/impact resistance. These polycarbonate resins also exhibited better hydrolytic stability as compared to their polyester counterparts.